Mediobanca board to review MPS 13.3 billion euro bid on Tuesday, source says

MILAN (Reuters) – Mediobanca (OTC:MDIBY)’s board will meet on Tuesday to discuss a bid for the Italian merchant bank by state-backed Monte dei Paschi di Siena (MPS), a person close to the situation said.

On Friday, MPS joined the consolidation wave sweeping Italian banking with a 13.3 billion euro ($13.96 billion) all-share offer to buy Mediobanca, which was welcomed by the Italian government, but puzzled analysts and investors. 

In a letter sent to staff on Saturday and seen by Reuters, Mediobanca’s Chief Executive Alberto Nagel said the MPS offer had not been agreed with the bank and that the board would express its views, with the aim of protecting the interests of all stakeholders, particularly employees.

On Friday, a person close to the situation told Reuters that MPS offer was not friendly, though not unexpected. 

MPS is offering 23 of its own shares for every 10 Mediobanca shares tendered, representing a 5% premium to Thursday’s closing price. However MPS shares lost 7% on Friday, meaning the offer now implies a 1.2 billion euro discount to the market price. 

($1 = 0.9530 euros)