Intesa Says Paschi Bid to Lapse If Holders Back Rival Deals

(Bloomberg) -- Intesa Sanpaolo SpA said its offer for Banca Monte dei Paschi di Siena SpA will lapse if Paschi shareholders back either of its proposed bids for Banco BPM SpA and Banca Generali SpA at an Oct. 29 meeting.

Intesa also increased the cash component of its offer by 25 euro cents ($0.28) for each Paschi share, conditional on Paschi shareholders rejecting the two transactions proposed by Chief Executive Officer Luigi Lovaglio, the bank said in a statement Saturday. It said the exchange ratio will be adjusted upward if Intesa distributes an interim dividend for 2026.

Intesa’s move turns Paschi’s meeting into a high-stakes decision over its future, effectively forcing investors to choose between Intesa’s takeover and Lovaglio’s plan to pursue Banco BPM and Banca Generali. 

Intesa preempted Lovaglio’s call for a higher price by increasing the cash portion of its offer, while making clear that approval of either rival bid would cause the Intesa proposal to lapse.

Intesa Chief Executive Officer Carlo Messina surprised markets in June by offering to buy Monte Paschi in a deal that would strengthen the bank’s dominant position in Italy, expand its wealth and investment banking operations through the addition of Mediobanca SpA and leave it with a large minority stake in the country’s biggest insurer, Assicurazioni Generali SpA.

Intesa has pledged to sell about half of Paschi’s branches to Unipol Assicurazioni SpA to address potential antitrust concerns.

While Monte Paschi’s board hasn’t formally rejected Intesa’s offer, it has raised concerns about the price and the plan to divest a substantial portion of its assets. In a move aimed at fending off Intesa, Lovaglio announced the two separate bids in August. 

Intesa’s bid triggered the so called passivity rule under Italian law, meaning Lovaglio needs support from at least two thirds of the votes cast to proceed with the transactions.

(Adds context on the proposed deals.)

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