Monte Paschi Plans to Replace Mediobanca CEO, Lovaglio Says
Speaking in an interview with Bloomberg TV on Wednesday, Lovaglio said he tried to call Mediobanca CEO Alberto Nagel but hasn't received an answer.
Nagel is 'not interested in the deal,' Lovaglio said on Wednesday from London. 'So I think we have to look for a new CEO.'
The comments underscore the tension between the two banks, with the offer period under way. Monte Paschi stunned Italy when it announced its plan in January, an audacious move for a lender that's still in the process of returning to full private ownership. Nagel has rejected the bid and in turn proposed a takeover of Banca Generali SpA, in what's been seen as a defensive move.
Lovaglio has argued a combination with Mediobanca would allow Monte Paschi to benefit in areas such as asset gathering, private banking, investment banking and insurance. Both banks would keep their brands after a deal, he said on Wednesday.
'There is a strong industrial and financial rationale,' he said in the interview. 'We are rewarding our shareholders for the next 10 years, with 100% payout, and moreover, thanks to fiscal benefits, we will increase the capital by €500 million each year.'
Lovaglio said he was confident that Mediobanca investors will tender more than 66% of the share capital during the offer period, which started July 14, but that he could achieve 'de facto' control of the rival with as little as 35%.
'The goal is to go above 66%,' he said.
Monte Paschi is offering 25.33 new shares for every 10 in Mediobanca, valuing the target at around €14.6 billion ($17 billion) as of Tuesday, below Mediobanca's market capitalization of around €15.1 billion. The valuation suggests investors expect the bid to be raised. The offer carried a premium of about 5% when it was first unveiled.
The deal is one of a series of overlapping M&A bids that are currently being negotiated and could reshape finance in the European Union's third-largest economy. The transaction is backed by the government in Rome, which still owns a stake in Monte Paschi and would like to build a third large banking group around the Tuscan lender.
Monte Paschi's plan also has the support of the billionaire Del Vecchio family and construction tycoon Francesco Gaetano Caltagirone, the largest investors in Mediobanca. The two also own stakes in Monte Paschi and Assicurazioni Generali SpA.
Both investors have been 'supportive from the very beginning,' Lovaglio said.
Mediobanca said on Friday that their financial involvement in so many companies 'constitutes a potential misalignment of the interests of these shareholders with those of the rest of the shareholding structure.'
Monte Paschi, considered to be the world's oldest bank still in operation, has only recently emerged from a deep restructuring. The bank was bailed out and later nationalized, following an ill-timed takeover just before the financial crisis.
Under Lovaglio, who took over in 2022, Monte Paschi has seen a jump in profitability, allowing the lender to resume dividend payments after a 13-year hiatus and the government to sell down its stake.
(Updates with comments from interview starting in sixth paragraph.)
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