Italian Lender Monte Paschi Said to Explore Potential Deal for Mediobanca

Banca Monte dei Paschi di Siena SpA (MDIBY) is reportedly exploring a potential acquisition of Mediobanca SpA, according to unnamed sources familiar with the matter.

Monte Paschi is considering options for acquiring either full or partial control of Mediobanca, the sources said. An announcement may be made as early as Friday, they added.

Shares of Monte Paschi have surged by over 100% in the past year, giving it a market capitalization of approximately €8.8 billion ($9.2 billion). Mediobanca has also seen substantial growth, with a 28% increase in share value over the same period, resulting in a market capitalization of around €12.7 billion.

Beyond its core banking operations, Mediobanca's value is partly attributed to its stake in Italian insurer Generali SpA, currently worth approximately €6 billion. Some sources indicate that Mediobanca could resist any approach from Monte Paschi and contemplate countermeasures.

A transaction involving Mediobanca would mark the latest in a series of consolidation moves within the Italian financial sector. Banco BPM SpA recently launched a takeover bid for asset manager Anima Holding SpA, while UniCredit SpA has pursued acquisitions of both Banco BPM and Germany's Commerzbank AG.

The Italian government has a stake of approximately 11.7% in Monte Paschi, down from majority ownership 18 months ago. A government sale of a portion of these shares in November was widely interpreted as a step towards creating a third major lender in the Italian banking sector through privatization.

Delfin Sarl, the family holding company of the late billionaire Leonardo Del Vecchio, recently increased its stake in Monte Paschi to 9.8%, potentially giving it a significant voice in any deal. Notably, Delfin is also the largest shareholder in Mediobanca.

Negotiations are ongoing, and there is no guarantee that they will result in a transaction, the sources emphasized. Representatives from both Monte Paschi and Mediobanca declined to comment.