Monte dei Paschi’s Defence Plan Loses Its Path to Approval
Shareholders representing about 30% of MPS oppose the proposal, blocking the two-thirds majority needed as Intesa presses its €35 billion bid.
Monte dei Paschi di Siena will convene its board on Monday after opposition from shareholders representing roughly 30% of the bank made management's current defence against Intesa Sanpaolo's €35 billion takeover bid mathematically impossible to approve.
Chief executive Luigi Lovaglio has scheduled an October 29 shareholder vote on the defence strategy. The proposal requires a two-thirds majority. With holders of about 30% declaring that they will vote against it, the maximum available support falls below that threshold even if every other shareholder backs management.
Reuters reported that the board will review the latest situation, although it is not clear whether directors will consider a revised defence. The meeting is not itself a transaction decision. Its importance is that the strategy described in the earlier vote notice no longer has a viable approval path.
Intesa strengthened its position by offering to raise the cash component of its cash-and-share bid by 25% if MPS shareholders reject the defence plan. The additional cash amounts to roughly €800 million, lifting the cash component from about €3 billion to €3.8 billion. The overall improvement is smaller because most of the consideration remains in Intesa shares, but it helped secure support from important MPS investors.
Delfin, the Del Vecchio family's investment vehicle and MPS's largest shareholder with 17.6%, has backed the improved offer. Intesa is offering 1.6 new shares plus €1.25 in cash for each MPS share, according to earlier reporting. Other holders have since opposed Lovaglio's proposal, bringing the declared blocking position to about 30%.
The contest is about more than headline price. MPS management has pursued an alternative consolidation strategy involving Banco BPM and Banca Generali. Intesa has said its offer would be withdrawn if shareholders authorize the rival plan. Investors are therefore choosing between immediate participation in Italy's largest bank and a more complex independent expansion whose execution and financing risks would remain with MPS.
The proposed takeover would reshape Italian banking. MPS is the world's oldest surviving bank and remains politically sensitive after its state rescue. Intesa would gain additional scale, deposits and market presence, but integration could require asset sales and regulatory concessions. Earlier reports indicated that Intesa may dispose of parts of MPS, including assets attractive to insurer Unipol.
The Italian government retains a smaller stake following its sell-down from the 2017 bailout and has reacted cautiously. Political concerns include employment, headquarters, competition and the future identity of the Siena-based lender. Those considerations may influence the process, but shareholder arithmetic now limits management's existing defence.
The board still has options. It could amend or withdraw the proposal, seek a different transaction, engage Intesa on improved terms or maintain its recommendation while acknowledging that approval is unlikely. Each path carries timing risk because the bidder can condition its sweetener on rejection of the defence.
Why it matters
The change turns an abstract hostile bid into a more immediate control contest. Intesa has used conditional cash and shareholder commitments to narrow MPS's alternatives without yet completing the acquisition. Management must now decide whether continued resistance can create additional value or merely delay an outcome that investors increasingly support.
For MPS shareholders, the key comparison is between the value and execution certainty of Intesa's offer and the risk-adjusted value of remaining independent. For Italian regulators and policymakers, the transaction raises questions about concentration and the final structure of a bank supported with public money less than a decade ago.
This is a material follow-up to the August launch of MPS's proposed counter-strategy. The new information is not another description of the original bid: it is the loss of the voting threshold needed to execute the defence and the board's resulting need to reconsider its position.