ROME / MILAN (Reuters) – Monte dei Paschi in Siena said it would give access to classified data to potential merger partners chosen by its advisers, as Italy goes ahead with plans to cut its holdings in the state-owned bank.
Confirming comments to Reuters from an earlier source on Monday, Monte dei Paschi (MPS) said his board had hired Credit Suisse to assist Mediobanca in the task of studying strategic options and exploring market interest for Tuscan banks.
Despite the chaos in the ruling coalition that risks triggering a government crisis, Italy’s Ministry of Finance is moving forward with plans to cut its 64% stake in MPS and fulfill promises made to the European Union as part of its 2017 bailout.
Rome has identified UniCredit as the ideal merger partner for MPS, sources said earlier, but Italy’s second-largest bank wants stringent terms to be met before considering the acquisition and has yet to sign a nondisclosure agreement.
The Ministry of Finance wants to see if Banco BPM, Italy’s third-largest bank which last year saw Rome as a possible partner of MPS, could be interested in entering the data space, said one of the sources.
Banco BPM could not immediately be reached for comment.
UniCredit, which is in the process of selecting a new chief executive after Jean Pierre Mustier decided to step down in April, will only consider a deal that does not affect its capital reserves.
They also want to ensure that an incentive package that Rome is preparing to facilitate sales will be approved in Brussels and Frankfurt, the sources said.
The UniCredit Board is expected to examine the list of candidates for CEO at a meeting on Wednesday before making a final decision in early February.
In the latest push to get the Milan-based bank to consider the deal, Rome is studying plans to divert at least 14 billion euros in non-performing loans from UniCredit to state-backed loan manager AMCO, sources said.
That could increase further to 20 billion to 21 billion euros, accounting for nearly all of UniCredit’s 22.7 billion euros in troubled debt at the end of September, one source added.
The Ministry of Finance has also set aside 1.5 billion euros to cover part of the capital shortfall of up to 2.5 billion euros in MPS.
The Siena-based bank will have to tell the European Central Bank in late January how it plans to fill the gap. The MPS said on Monday that it was pushing back around 10 days to January 28 a board meeting called for approving capital measures.
The tax cuts introduced by Rome for the 2021 merger would cost UniCredit a net profit of 2.4 billion euros if it took the losing MPS.
But the potential takeover is having resistance from within the bank as well as among some of UniCredit’s leading domestic investors.
To remove a major hurdle to a potential deal, Italy is working on a complex scheme requiring bail and a possible spin-off involving state-owned company Fintecna to deal with around 10 billion euros in claims, both in court and out of court, faced by MPS.
Reporting by Giuseppe Fonte and Valentina Za; Edited by Kirsten Donovan, David Evans and Jonathan Oatis
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