The privatization of the bailed-out bank Monte dei Paschi di Siena (MPS), according to the Italian treasury will be handled by UBS, Jefferies, and Clifford Chance.
Rome is obligated to eventually sell its 64% ownership of the bank under commitments made when MPS received a 5.4 billion euro ($5.72 billion) bailout in 2017. These commitments were made with the European Union competition regulators.
Italy accepted Brussels’ revised privatization terms after an attempt to sell the Tuscan banking to larger rival UniCredit in 2021 failed.
Giancarlo Giorgetti, the economy minister, stated this week that MPS might revert to private ownership by the end of the following year.
Giorgetti and Prime Minister Giorgia Meloni both stated recently that the government will use the privatization of MPS to attempt to increase competition among Italian banks.
The possibility of a merger with Banco BPM or BPER Banca, the third and fourth-largest banks in Italy, respectively, is now more likely, despite the fact that both have repeatedly stated they have no interest in MPS.
A share placement is thought to be the most likely alternative to reduce the state’s ownership and move towards re-privatization promises given the absence of prospective bidders in the near future.
At the present exchange rate, Rome’s investment in the bank as part of a larger 2.5 billion euro capital boost finalized in the fourth quarter of last year is worth just over 2 billion euros, or slightly over the 1.6 billion euros the Treasury’s holding is worth today.
The privatization of MPS is a significant component of a sell-off scheme worth 20–21 billion euros over the next three years that the government announced last month in an effort to control Italy’s debt load, which is the second-largest in the eurozone as a percentage of GDP.
The Treasury identified an offer to institutional or small investors, including the bank’s employees, as one of the alternatives to privatizing MPS under a 2020 decree. It also included potential extraordinary operations, such as a merger deal.
