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Monte dei Paschi Plans Closer Look at Banco BPM Offer Amid Concerns with Intesa Sanpaolo Bid

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Monte dei Paschi Plans Closer Look at Banco BPM Offer Amid Concerns with Intesa Sanpaolo Bid

Banca Monte dei Paschi di Siena's (BMPS.MI) directors are planning deeper technical analyses of Banco BPM's (BAMI.MI) merger proposal amid a lower-than-average premium in the competing offer presented by Intesa Sanpaolo (ISP.MI).

In a late Thursday update, the targeted Italian lender said its board deemed that in order to fully gauge the industrial merits and financial sustainability of the transaction, Banco BPM's combination proposal would require a comprehensive and rigorous assessment. Directors are particularly keen to take a look into the potential impact of the deal on the company's capital profile and how it can benefit shareholders, customers, employees, and its markets of operations.

BMPS is also continuing its assessment of a separate takeover proposal from Intesa Sanpaolo, which values the target bank at 30.6 billion euros and also includes the sale of a large portion of its operations to Italian insurer Unipol Assicurazioni (UNI.MI).

Based on initial analysis, BMPS directors said Intesa Sanpaolo's offer of 1.6 newly issued shares and 1 euro in cash per share reflects a premium lower than average when compared with similar transactions in the Italian banking sector. They said the bank's valuation in the offer also represents a differential of 3.4 billion euros to the company's market capitalization pre-proposal.

Directors also raised concerns regarding the composition of the consideration in the offer, saying it would leave BMPS shareholders vulnerable to execution, integration and realization risks associated with the transaction.

Amid concerns for the offer, BMPS committed to continue its review of Intesa Sanpaolo's proposal in line with fiduciary duties. It also assured the continuous execution of its strategy, including the integration with subsidiary Mediobanca Banca di Credito Finanziario (MB.MI).

In early morning trading, the shares of BMPS, Banco BPM and Mediobanca dipped marginally, while Intesa Sanpaolo and Unipol shares declined 1%.

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