MILAN – You're used to surprising the market, and in this case too you've announced an unprecedented deal through a double takeover bid (OPS) on Banco BPM and Banca Generali, aiming to create a new national champion in the financial sector. Why should MPS shareholders choose your proposal instead of accepting Intesa's offer?
“Because our project is different, and it has a strong industrial vision. Intesa splits up MPS, transferring its branch network, customers and relationships, while our project preserves its integrity and places Monte dei Paschi at the centre of a group with Italian roots, more competitive and with a stronger capacity to extend credit, stronger in asset management, insurance and strategic advisory. Closer to the real economy, with decision-making centres rooted in local territories. And above all, we guarantee plurality and competition. To shareholders we offer value both today and tomorrow, with an extraordinary distribution of around €4 billion between cash and Generali shares, high and sustainable remuneration over time, and the chance to take part in the future growth that will come”.
Your operation, this double OPS, is considered by some analysts difficult to execute. What's your response?
“That's not the case at all, it’s complex but entirely manageable. It should first be seen as a merger between two traditional banks, MPS and Banco BPM, which are complementary from a geographic and commercial standpoint. With Banca Generali we accelerate the development of a major wealth management hub, with a universally respected manager like Mossa, and we simplify the group's structure. Anyone who conflates these two paths wants to amplify the complexity. Doing both transactions together means making visible the strength of the new group's overall architecture. In fact, the operation is a conventional merger between two complementary banks, to which we attach a development enhancer, the Banca Generali platform. Mediobanca, on the other hand, has its own separate roadmap”.
Carlo Cimbri, the CEO of Unipol, who offered to buy MPS's brand and half its branches from Intesa, called your project "creative" and aimed at defending the "status quo". How do you respond?
“Defence tends to preserve the status quo; this project, on the other hand, increases the group's scale, diversifies revenue sources and expands growth opportunities. The numbers speak for themselves: it will have 11 million customers, over €800 billion in financial assets, around €250 billion in loans to customers and with double-digit value creation. That looks like industrial strategy to me, but if building a stronger group counts as "creativity", then I'll accept the compliment”.
With you, BPM and Banca Generali, a second banking hub for customer lending and branch network could emerge, taking that role away from BPER and Unipol, subject to the Intesa deal. What role will it play in the country, and how will it differ from the model of the competing offer?
“We want to be an engine of economic growth for Italy, with more credit for businesses, more support for families, and turning savings into productive investment for greater support to the real economy. It will be an integrated financial group, competitive at the European level too, but deeply close to local territories. MPS and BPM share a common lending philosophy, borne out by the positive trend in their loan market shares. What's more, if we look at the period following the UBI integration, Intesa saw a reduction in its market share in lending. Offering more plurality means creating a stronger system. We are not breaking up a bank to redistribute its activities, customers and employees”.
One of the critical points is the exchange ratio with Banco BPM, which offers no premium to BPM shareholders. And the market currently seems cautious, judging by the performance of the shares involved. Is there room to improve the offer, or has the market not understood something?
“At the start of June, Banco BPM had put forward a merger of equals, describing the project as having a strong strategic and industrial rationale. On that occasion there was talk of balanced governance, complementarity, growth in earnings per share and significant value creation for shareholders. We continue to share that vision. We have moved with the logic of a merger of equals, in line with market valuations, and the shares have remained tied to the proposed exchange ratio. The Public Exchange Offer is a technical market instrument for pursuing those same objectives. To keep the logic of a merger of equals, we have also planned the extraordinary distribution of €4 billion. So the question of the premium needs to be read in the right context: BPM shareholders will join a broader, more diversified banking platform that generates higher-quality earnings, with significant growth in dividend per share, benefiting from synergies and over €30 billion of total distributions by 2030. And the operation is clearly earnings-accretive for Banca Generali shareholders too”.
If your offer succeeds, will it keep Banco BPM's perimeter intact, or will we see it broken up?
“No break-up. Our project unites, it doesn't divide. We are complementary in terms of customers, territories and expertise. BPM is stronger in the North, MPS in the center and south of Italy. We're combining these strengths to build a stronger group, not to dismantle an existing one. Local businesses need reassurance that lending won't decrease, and we can offer the certainty that this won't happen as a result of our project”.
Generali seems inclined to follow you and accept your shares in exchange for Banca Generali. But if it became your shareholder with around 6%, while you remained its shareholder with 9%, which of you would have to drop below 3% because of the rule banning cross-shareholdings?
“I'd say neither of us. The issue was addressed in advance, and we obtained a specific legal opinion. Generali would receive the shares as part of an exchange offer, not by buying them on the market. And according to the opinion we received, in this case there would be no obligation to drop below 3%”.
Isn't there some risk for Italian savings? What advantages will Generali get, and what will you do about AXA?
“No risk at all. We are aware of Generali's importance and we approach it with great responsibility. In the meantime, we welcomed the fact that its board expressed willingness to evaluate our proposal and the possible opportunities for industrial partnership, leveraging MPS's distribution capacity, which today is one of the best-performing commercial platforms in the Italian market. The Banca Generali transaction is a first step towards developing industrial collaborations with the Generali Group, through greater distribution of insurance and wealth management services across our network, and the offer of banking products and services to their very large customer base. The agreement with AXA expires next year, and any decision will be taken at the appropriate time and in the appropriate forums”.
You are subject to the passivity rule. You need two-thirds of the shareholder meeting to get your offers approved. If Intesa has made its move, it may be counting on having some major shareholders on its side. What is your relationship today with the Caltagirone group, which holds 10.2% of MPS?
“This is a matter of industrial project and value creation. Our two operations have a clear strategic rationale and the goal of creating a stronger group with very attractive economics. If a project combines growth, profitability and capital solidity, I expect the market to take part. Our plan also preserves MPS's integrity, strengthens competition in the banking system, and maintains closeness to families, businesses and local territories. I think shareholders, including the largest ones, will decide with value creation and the country's benefit in mind”.
At the shareholder meeting that restored you to MPS and allowed you to defeat the board's list, Delfin's votes — it holds 17.5% of MPS — were decisive. Have you had reassurances this time as well?
“We have not had any prior contact regarding our initiative with any shareholder, and therefore not with Delfin either”.
Major funds such as BlackRock, Vanguard, Norges and Amundi, which have more money invested in Intesa than in MPS, will also play an important and perhaps decisive role at the shareholder meeting. Could this situation tip the balance in Intesa's favour?
“I don't think major investors vote according to the size of their holdings. They will assess returns, the sustainability of the project and the track record of results achieved. And since 2022, from the capital increase, the share price has grown by more than 500%, we have distributed significant dividends and achieved one of the best total shareholder returns in the European banking sector. These are results that investors know how to evaluate”.
How do you plan to convince Crédit Agricole, the Milan-based bank's reference shareholder with 29.9%, to join the exchange offer and give up control in order to enter the MPS group, where Italian shareholders could hold a majority? Is there a possibility of offering them some asset and cashing them out, as happened with Intesa a few years ago?
“Crédit Agricole is a major group that we know and respect; our proposal offers the chance to take part in a stronger, higher-value institution, while also developing opportunities for industrial collaboration, a logic that is very understandable to them. We'll see”.
Prime Minister Giorgia Meloni has said she doesn't want MPS to be "broken up, losing its own name and identity", and wants a "solid and competitive" banking system. During the takeover bid for Mediobanca, politics exercised significant moral suasion on Piazzetta Cuccia's major shareholders. How much weight do these words carry today?
“These are important words, because they recognise the value of Monte dei Paschi's integrity, its name and its role in the country. It is a significant acknowledgement of the work of the colleagues who made the bank's rebirth possible. MPS is not just a bank, it is a national institution that holds together history, territory and future. A banking system serves a country well when it guarantees credit to families and businesses, competition, and savings channelled into the real economy. And over the past year our lending grew by 4.6%, compared to 0.5% for the sector”.
The MEF (Ministry of Economy and Finance) is still a significant shareholder of yours with 4.8%. And as soon as Intesa's offer appeared, it halted the sale of its stake. Giorgetti speaks of market neutrality, but on UniCredit and Banco BPM he took a different stance, activating golden power. Do you see the possibility of intervention in this case too?
“I have read and I respect the Minister's position of neutrality, and I consider it positive that the concerns of local authorities have been acknowledged. We want to create a project that generates value for customers, the group's people and the country's system. The judgement will be up to the market and the shareholders”.
Banca Intesa has filed a complaint with Consob in which it accuses you, among other things, of having called the shareholder meeting late (29 October) in order to lift the passivity rule. How do you respond?
“We always operate in full compliance with the rules and with the passivity rule, which above all protects shareholders. Last year, if you recall, Mediobanca's leadership announced their Public Exchange Offer in April and the shareholder meeting was held at the end of August. Consob will make its own assessments with its usual independence; we are focused on the industrial value of our proposal”.
