Intesa Sanpaolo boosts cash offer for MPS by €0.25 per share, ties deal to October 29 vote
Intesa Sanpaolo has raised its cash offer for Monte dei Paschi di Siena (MPS) by €0.25 per share, bringing the cash component of its public exchange offer to €1.25 per MPS share. The adjustment, confirmed after an extraordinary board meeting, increases the total cash portion of the deal to €3.8 billion if all shares are tendered.
The offer includes an exchange ratio of 1.6 Intesa Sanpaolo shares for every 1 MPS share. Combined with the higher cash payout, this values each MPS share at €10.341 — a 15.3% premium over its closing price of €8.970 on 5 June 2023.
Critical vote on 29 October
The future of the offer hinges on a vote at MPS’s extraordinary shareholder assembly on 29 October 2023. Intesa Sanpaolo has made its offer conditional: if shareholders approve any of the three agenda items related to MPS’s rival proposals — namely, exchange offers for Banco BPM and Banca Generali, plus related capital adjustments — the Intesa offer will become definitively ineffective.
Intesa has explicitly stated it will not waive this condition. Should the MPS proposals pass, the bank will invoke their non-fulfilment as a contractual event, triggering the collapse of its own bid.
Why the stakes are high
The revised cash offer raises the total valuation of MPS under the deal to €31.4 billion, with €27.6 billion to be paid in Intesa shares and the remainder in cash. The €0.25 per share increase represents an additional €760 million in immediate liquidity for MPS investors.
For shareholders, this shift improves the attractiveness of Intesa’s offer: cash provides certainty, unlike shares whose value fluctuates with market sentiment. With Italy’s banking sector under strain, the additional cash component reduces exposure to volatility while strengthening immediate returns.
Criticism of MPS’s alternative plan
Intesa Sanpaolo sharply criticized MPS’s alternative strategy, calling it a structure with “no premium” and characterized by “uncertainty, challenging synergies and execution risks.” The plan requires two simultaneous share exchanges — one each with Banca Generali and Banco BPM — alongside a capital reduction to enable a future dividend payout.
Analysts note this creates a tangled web of dependencies. Integrating two major banks while managing operational links with Mediobanca could stretch management resources and delay cost savings. Intesa contrasts this with its own approach: a clear, two-element transaction — cash plus stock — with no further conditions.
Further commitments to Siena
Intesa Sanpaolo reiterated its commitment to Siena and Tuscany, pledging “further concrete initiatives” in the region. While specifics remain undefined, the statement signals awareness that MPS’s institutional presence in Siena carries symbolic weight beyond balance sheets.
In case the final dividend distribution for 2023 includes a cash advance, the share exchange ratio will be recalibrated. Intesa confirmed its offer remains responsive to dividend policy changes — a detail few rival bids include.
No changes are expected to the offer’s timeline. If the MPS assembly rejects its own proposals, Intesa’s offer remains open with the enhanced cash terms. If it approves them, the bid ends — and with it, any premium on MPS shares tied to Intesa’s involvement.
