Mediobanca raises barricades and rejects MPS's takeover bid. The board of directors of Piazzetta Cuccia, meeting to examine Monte's proposal, takes three hours to reject the public exchange offer, which it defines as "hostile", "strongly destructive of value", "contrary to the interests" of Mediobanca and "devoid of industrial and financial rationale". Piazzetta Cuccia also points the finger at its shareholders Delfin (19.4%) and Caltagirone (5.5%), raising the issue of the "potential lack of homogeneity" of interests of the Del Vecchio family's holding company and the Roman entrepreneur's group, compared to the other shareholders of the bank, due to the "significant shareholding connections" that see them as protagonists in MPS and Generali, whose control represents the real stake in the attack on Mediobanca.

The stock market continues to follow the operation and Mediobanca, on the day of its response, lost 4.4% and Mps fell by 2.4%: the discount of the takeover bid compared to the values at which Nagel's bank is trading has fallen to 9.5%.

But what are the criticisms leveled at the offer? First of all, Mediobanca believes that it «has no industrial value, compromising the identity and business profile» of the bank, «focused on high value-added business segments and with clear growth trajectories». The board of directors - whose assessments were abstained by the directors Sandro Panizza and Sabrina Pucci representing Delfin and Caltagirone - foresees a «significant deterioration» of the investment banking and wealth management activities , hypothesizing a diaspora among the clientele, also in favor of «foreign banks», a hemorrhage that could be «accompanied by the loss of the best human resources» while the absence of «overlapping distribution networks» precludes «appreciable cost synergies».

According to Mediobanca, the offer is also "negatively characterized by the difficulty in determining the intrinsic value" of MPS , whose assets must deal with "significant tax assets, impaired assets and risks of legal disputes (3.3 billion), risk indicators worse than other Italian banks" and a geographical concentration that sees "70% of branches in central-southern Italy", a focus on SMEs and the absence of product factories. This results in the absence of a "financial rationale", with the risk of "a strong prejudice" on the profits, "expected to grow", of Mediobanca, and in the face of a consensus that sees "a decline" in MPS profits, with the effect of penalizing the "valuation multiples" that Piazzetta Cuccia enjoys compared to Siena. "The fall in MPS shares after the announcement demonstrates the fragility of the stock market price, which makes the success of the operation unlikely".

Sources close to the MPS offer replied that "the industrial nature of the business combination is so obvious that Mediobanca itself has long since decided to include consumer credit in its scope", an activity that is "certainly" not investment banking but "much more in the nature of a commercial bank". MPS will not "undermine the identity" of Mediobanca, whose profit - it is noted - investment banking and wealth management activities contribute "only about 35%" compared to "about 30%" of Compass while "the lion's share" (40%) is made by Generali . Whose 13% share - the true "value-added activity and growth trend" of Mediobanca - is the one that contributes "in an important way" to the stock market value of Piazzetta Cuccia.

The offer, in addition to the market, once notified, will be carefully examined by the authorities, starting with the ECB. Since this is a systemically significant merger, Frankfurt is certainly expected to be demanding on aspects such as the business model and capitalization. The threshold indicated as the objective to which the takeover bid is bound (66.7%) is however at the same level as that which could be imposed in the case of acquisitions for this type of bank. One last piece of news concerns the consultation agreement of Mediobanca which has always supported the management and has seen the Finprog of the Doris family contribute an additional 1.88 million shares. The overall quota bound by the agreement - but which does not apply to individual shareholders for the purposes of adhesion to the takeover bid - has risen from 11.4 to 11.62%.

(Online Union)

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