Latest news with #Lovaglio
Reuters
06-08-2025
- Business
- Reuters
Mediobanca suitor Monte dei Paschi raises outlook after strong quarter
MILAN, Aug 6 (Reuters) - Italy's Monte dei Paschi di Siena ( opens new tab on Wednesday raised its profit forecast for the year after much higher than expected second-quarter profit and said it was determined to buy bigger rival Mediobanca ( opens new tab. Monte dei Paschi's (MPS) 16 billion euro ($19 billion) all-share buyout offer for Mediobanca, which runs until September 8, is one of a dozen takeover bids reshaping Italian banking. Capital reserves, which MPS can tap to sweeten its offer, increased sharply in the quarter. CEO Luigi Lovaglio ruled out the idea of MPS abandoning the bid, given Mediobanca's strong opposition, and reviving instead an earlier project to combine with Banco BPM ( opens new tab, which has recently freed itself from UniCredit's ( opens new tab grip. "We're quite determined ... to build the third competitive force in the Italian landscape," Lovaglio told analysts. BPM said on Tuesday it could look at MPS, of which it already owns 9%, as it weighs tie-up options, but only after the Mediobanca bid concludes. MPS said net profit in the three months through June totalled 479 million euros ($554 million), compared with a 349 million euro forecast in a company-provided analyst consensus. At 1.05 billion euros, revenues were up 4% versus the previous quarter, with trading income jumping by a third, net interest income up despite falling rates, and net fees also rising. Analysts had looked for revenues of 982 million. MPS was rescued by the state in 2017 and has since restructured under Lovaglio. Like other Italian lenders, it has seen earnings lifted by higher interest rates in recent years, while also benefiting from the release of cash set aside against legal risks after favourable court rulings. With profits recovering after years of losses, MPS has been able to tap into tax credits to support earnings. It is counting on such a boost to reward Mediobanca's shareholders once it can add the target's income to its own accounts. MPS said its core capital ratio stood at 19.6% of assets, one of the highest in the industry, which could give it room to improve the Mediobanca bid. To fight MPS' offer, Mediobanca is attempting to buy private bank Banca Generali and has called a shareholder vote on August 21 on the plan. It had been forced to postpone an earlier vote for fear it would fail to receive sufficient investor support. ($1 = 0.8639 euros)
Mint
16-07-2025
- Business
- Mint
Monte Paschi Plans to Replace Mediobanca CEO, Lovaglio Says
(Bloomberg) -- Banca Monte dei Paschi di Siena SpA Chief Executive Officer Luigi Lovaglio said he plans to replace his counterpart at Mediobanca SA, should he succeed in taking control of the larger rival. 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.) More stories like this are available on
Reuters
12-06-2025
- Business
- Reuters
Breakingviews - Mediobanca great escape has more twists ahead
LONDON, June 12 (Reuters Breakingviews) - Judging by the Mediobanca ( opens new tab stock price, CEO Alberto Nagel has pulled off an M&A defence coup. His move to snap up a rival wealth group has helped boost the 16-billion-euro Italian bank's shares, taking their price above the level of a hostile offer from Banca Monte dei Paschi di Siena ( opens new tab (MPS). Yet Nagel can't sit easy: key votes and his own investors complicate matters. After MPS made an unsolicited offer for Mediobanca in January, the Milan-based group's boss put together an alternative path with a 6-billion-euro plan to buy Banca Generali ( opens new tab, a wealth manager owned by insurer Assicurazioni Generali ( opens new tab. By moving to create a large money-management business, Nagel has boosted his stock. Mediobanca now trades around 9% above the value of the all-share MPS offer. One interpretation is that investors are excited about the prospect of an enlarged wealth player if the Banca Generali deal goes through. One complicating factor, however, is that some of Nagel's biggest shareholders are not yet endorsing the Banca Generali purchase, which requires 50% approval at a June 16 Mediobanca shareholder meeting. Billionaire Francesco Gaetano Caltagirone, who owns 10% of Mediobanca and 5% of MPS, has said that Nagel's deal lacks industrial logic. He has also been buying stock ahead of the meeting, which may partly explain why Mediobanca's shares have risen. Then there's Delfin, which owns nearly 20% of Mediobanca and a tenth of MPS. If that vehicle and Caltagirone oppose the Banca Generali acquisition, Nagel would need a minimum 60% vote turnout and the support of most other shareholders to carry the day. He may feel OK about that risk, since other shareholders have backed the deal. But the next question is whether the insurer Assicurazioni Generali, which owns 50% of the similarly named wealth manager, will agree to sell to Mediobanca and at what price. The slim current 9% premium versus Banca Generali's undisturbed price, and the fact that Nagel is offering to pay in kind through Mediobanca's shares in Generali, make the deal vulnerable to a cash counteroffer from a rival suitor. And Generali cannot be seen to give a sweet deal to Mediobanca, its biggest shareholder. The third challenge is MPS itself. True, CEO Luigi Lovaglio seems to be in a tight spot. Just to get its offer up to the current value of Mediobanca, MPS might need to raise its 15-billion-euro bid by over 1 billion euros. Yet by paying much more for his larger rival, Lovaglio risks chasing his tail: his own share price would probably fall, depressing the value of the bid. Yet Lovaglio has other options. He currently wants two-thirds of investors to accept his soon-to-be-launched tender offer, a level that would allow him to merge the two banks and enjoy all the deal benefits. But he could settle for a lower threshold of 50%, or below. And if Delfin and Caltagirone backed him, he would already be at 30%. Such a move would be sub-optimal. With a lower take-up, Lovaglio would be under pressure to buy the rest, and might not get some or even most of the deal's synergies, which include 300 million euros of cost savings as well as tax benefits. Yet he could still exert control over his target. Mediobanca, meanwhile, would get the disruption of a takeover, and a more complex governance. Nagel's great escape is not yet complete. Follow @Unmack1, opens new tab on X
Yahoo
14-04-2025
- Business
- Yahoo
MPS chief puts revamp of world's oldest bank to market test with Mediobanca bid
By Valentina Za MILAN (Reuters) - When a group of Harvard Business School students visited Italy's Monte dei Paschi di Siena in January, they gathered notes to build a case study on how to turn around a bank. The strength of that case may now depend on whether shareholders on Thursday approve CEO Luigi Lovaglio's surprise 12-billion-euro ($13.6 billion) hostile takeover offer for rival Mediobanca, made just days after the student visit. The softly-spoken 69-year-old, a stalwart of Italian banking for more than five decades, could need all his powers of persuasion to prevail with a plan that has divided opinion. Advisory group Institutional Shareholder Services has urged shareholders to reject the plan as it leaves "little margin for error", while rival Glass Lewis is in favour, saying Lovaglio's track record provides guarantees for shareholders. The epitome of Italy's banking woes until a 2017 state bailout that made it an expected future takeover target, MPS stunned Italian finance when it moved on Mediobanca. Fans say it has put the world's oldest bank on the front foot, after years of fixing its finances. "Lovaglio turned MPS from a passive into an active player. Anyone who's ever been in charge will tell you there is no better way of motivating people," Alessandro Profumo, former CEO of Italian bank UniCredit, where Lovaglio spent 44 years, and former MPS chairman, told a recent event. Recruited to MPS in February 2022, Lovaglio soon after braved tough markets to push through a vital cash call. He then succeeded in riding higher interest rates to grow profits despite shedding a fifth of the bank's workforce in a quarter. Lovaglio says Mediobanca's wealth and investment banking operations will complement MPS' commercial franchise, while the target's valuable stake in insurer Generali provides options about what to do next. Mediobanca has said the tie-up risks weakening its business model. PASSION FOR RESULTS In cutting its 64% stake to the current 11.7%, the Italian government had said it wanted a tie-up to grow MPS into a major player. But when UniCredit late last year swooped on Banco BPM - widely seen as MPS's most likely merger partner - Lovaglio's options shrank. "On the market there are not a lot of opportunities," he said in unveiling the Mediobanca bid. Lovaglio has the backing of construction tycoon Francesco Caltagirone and the heirs of the late billionaire Leonardo Del Vecchio, who together own slightly less than 20% of MPS after building stakes when Rome last sold a chunk of shares in November. They also own 27% of Mediobanca itself and 17% of Generali, stoking speculation about their ultimate goal. But to win Thursday's vote, Lovaglio must also convince other MPS shareholders - mostly foreign funds that bought into share sales by the government in November 2023 and March 2024. Having expected MPS would be taken over, these funds must weigh up a deal that relies firstly not on cost cuts, but on tax credits which MPS can use to boost profits if it secures 50% plus one share of Mediobanca. Lovaglio's pitch is likely to draw heavily on his famed tenacity, and nuts and bolts knowledge of commercial banking. One adviser, who declined to be named, remembered being quizzed by Lovaglio in the middle of the night as the CEO perused documents first hand, including the hundreds of pages relating to MPS' judicial cases. "I'm no genius," Lovaglio once told Reuters. "I simply developed a method over time. But to develop a method you first need a passion for good results." ($1 = 0.8799 euros) Sign in to access your portfolio
Reuters
14-04-2025
- Business
- Reuters
MPS chief puts revamp of world's oldest bank to market test with Mediobanca bid
MILAN, April 14 (Reuters) - When a group of Harvard Business School students visited Italy's Monte dei Paschi di Siena ( opens new tab in January, they gathered notes to build a case study on how to turn around a bank. The strength of that case may now depend on whether shareholders on Thursday approve CEO Luigi Lovaglio's surprise 12-billion-euro ($13.6 billion) hostile takeover offer for rival Mediobanca ( opens new tab, made just days after the student visit. The softly-spoken 69-year-old, a stalwart of Italian banking for more than five decades, could need all his powers of persuasion to prevail with a plan that has divided opinion. Advisory group Institutional Shareholder Services has urged shareholders to reject the plan as it leaves "little margin for error", while rival Glass Lewis is in favour, saying Lovaglio's track record provides guarantees for shareholders. The epitome of Italy's banking woes until a 2017 state bailout that made it an expected future takeover target, MPS stunned Italian finance when it moved on Mediobanca. Fans say it has put the world's oldest bank on the front foot, after years of fixing its finances. "Lovaglio turned MPS from a passive into an active player. Anyone who's ever been in charge will tell you there is no better way of motivating people," Alessandro Profumo, former CEO of Italian bank UniCredit ( opens new tab, where Lovaglio spent 44 years, and former MPS chairman, told a recent event. Recruited to MPS in February 2022, Lovaglio soon after braved tough markets to push through a vital cash call. He then succeeded in riding higher interest rates to grow profits despite shedding a fifth of the bank's workforce in a quarter. Lovaglio says Mediobanca's wealth and investment banking operations will complement MPS' commercial franchise, while the target's valuable stake in insurer Generali ( opens new tab provides options about what to do next. Mediobanca has said the tie-up risks weakening its business model. In cutting its 64% stake to the current 11.7%, the Italian government had said it wanted a tie-up to grow MPS into a major player. But when UniCredit late last year swooped on Banco BPM ( opens new tab - widely seen as MPS's most likely merger partner - Lovaglio's options shrank. "On the market there are not a lot of opportunities," he said in unveiling the Mediobanca bid. Lovaglio has the backing of construction tycoon Francesco Caltagirone and the heirs of the late billionaire Leonardo Del Vecchio, who together own slightly less than 20% of MPS after building stakes when Rome last sold a chunk of shares in November. They also own 27% of Mediobanca itself and 17% of Generali, stoking speculation about their ultimate goal. But to win Thursday's vote, Lovaglio must also convince other MPS shareholders - mostly foreign funds that bought into share sales by the government in November 2023, opens new tab and March 2024, opens new tab. Having expected MPS would be taken over, these funds must weigh up a deal that relies firstly not on cost cuts, but on tax credits which MPS can use to boost profits if it secures 50% plus one share of Mediobanca. Lovaglio's pitch is likely to draw heavily on his famed tenacity, and nuts and bolts knowledge of commercial banking. One adviser, who declined to be named, remembered being quizzed by Lovaglio in the middle of the night as the CEO perused documents first hand, including the hundreds of pages relating to MPS' judicial cases. "I'm no genius," Lovaglio once told Reuters. "I simply developed a method over time. But to develop a method you first need a passion for good results." ($1 = 0.8799 euros)
