San Francisco Frontiers - Bid by Italy's Intesa bank to take over MPS gets boost

After raising its offer for MPS, the world's oldest bank, to 31 billion euros ($35 billion) on Saturday, Intesa secured the decisive backing of Delfin, the holding company of the Del Vecchio family, which owns 17.6 percent of MPS.

On Thursday, the holding company of construction magnate Francesco Gaetano Caltagirone, which holds 13.5 percent, said it would oppose a rival plan that has been put forward by MPS management.

Under that proposal, MPS would buy both Banco BPM and the wealth management firm Banca Generali, thwarting Intesa's takeover bid.

MPS shareholders are to vote on the plan at a meeting on October 29 but its chances of passing seem increasingly unlikely.

Credit Agricole, which holds 29.3 percent in Banco BPM, said Thursday that it would not back MPS's proposal, depriving the latter of crucial support.

"What is certain is that, given our position in Italy... we will play our role and be very active. And we will see what is the best scenario and with what timing," Credit Agricole chief Olivier Gavalda said on a video call.

Big institutional investors, some of whom like BlackRock hold stakes in both banks, have yet to disclose their plans.

According to calculations by Equita, a financial services firm that is advising Intesa, the camp in favour of its offer now represents nearly 33 percent of MPS's capital.

Founded in Tuscany in 1472, MPS was rescued in 2017 by a 5.4-billion-euro rescue led by the Italian state, which has since gradually reduced its stake.

MPS has turned things around, becoming Italy's third-largest bank last year after the acquisition of Mediobanca.

The Italian government, still a shareholder with a 4.86 percent stake, has not commented on the ongoing consolidation of its banking sector.

On Thursday on the Milan Stock Exchange, MPS shares were down 2.22 percent at 10.93 euros in afternoon trading.

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E.Walker--SFF