Mediobanca, MPS calls the price inadequate and the value less valuable.

Mediobanca has rejected MPS's public exchange offer, which is scheduled to launch on Monday, July 14, in a 118-page document summarized in a press release issued by the board of directors. CEO Alberto Nagel will give his opinion in a conference call with analysts.

The offer is "hostile and unconventional," "devoid of any industrial rationale or advantage for the bank's shareholders," according to the Piazzetta Cuccia board, which further believes the consideration offered is "inconsistent and completely inadequate."

This is based on the fairness opinions expressed by advisors Centerview, Equita, and Goldman Sachs. Essentially, the 2,533 Siena shares offered for each share of the bank led by Nagel—it is noted—represent a 32% discount compared to the average exchange ratio identified by the board of 3.71. Meanwhile, at the close of the trading week, the implied discount was 3.9%. Furthermore, the merger proposed by Monte dei Paschi, rather than the promised synergies, actually creates "dissynergies," thus making it less profitable. The Mediobanca board estimates the synergies at €460 million in the event of a merger between the two banks, but could reach up to €665 million in the absence of a merger.

The likelihood of a merger will be affected by the number of participants in the offer, which closes on September 8th. In this regard, the provision of a double threshold in MPS's takeover bid—the first set at 66.67%, the other at 35%—"denotes opaqueness regarding the true purpose of the offer," Mediobanca's statement emphasizes. In particular, the lower threshold "signals the desire to complete the transaction, even in the face of significant risks of disinheritance and value destruction."

A key issue is identified in the presence of the same shareholders—namely, Delfin, owned by the Del Vecchio heirs, and the Caltagirone group—in MPS, Mediobanca, and Generali. According to the Piazzetta Cuccia board of directors, an all-share offering entails "a potential misalignment of the interests of these shareholders with those of the rest of the shareholder base."

The takeover bid also creates a paradox. If Monte dei Paschi were to hold the entire capital of the Milanese bank, current Mediobanca shareholders would hold the majority (62%) of MPS post-offer, "despite the offeror having declared, in the offer document, its intention to acquire control (even de facto)" of Piazzetta Cuccia.

The press release, prepared by Mediobanca, then launches an all-out attack on the institution led by Luigi Lovaglio, which "has a history marked by fragile assets and earnings." Furthermore, "market consensus predicts that MPS will have recurring profitability among the lowest among Italy's major banks."

In short, therefore, the operation orchestrated by Siena and its shareholders has the inevitable effect of placing the majority of the risks and costs of a combination deemed "informatively deficient, unnatural, and highly destructive of value" on Mediobanca shareholders.

While the Milanese bank is playing its last chance to avoid falling into Siena's hands, on another front in the game of chance, Credit Agricole has announced that it will ask the ECB for authorization to exceed its 20% stake in Banco BPM, of which it already holds a 19.8% stake. The aim is to move "just above the 20% threshold," a level that allows it to exercise "significant influence" over the bank and to account for the stake in equity, "consistent with Credit Agricole's position as a long-term shareholder and industrial partner of Banco BPM." The move by Agricole, which "does not intend to acquire" control of Banco BPM or exceed the takeover threshold, confirms the French banks' intention not to hand over their shares to UniCredit, whose takeover bid risks ending in a dead end.