Monte dei Paschi, Italy's oldest bank, has proposed to acquire Mediobanca in a share swap deal valued at approximately €15.992 per share, a 5% premium to the closing price on January 23. The deal, which requires shareholder approval, aims to create a 'powerful business combination' and leverage tax credits from previous losses. Monte dei Paschi CEO Luigi Lovaglio believes the transaction will benefit both banks and solidify Italy's financial system.
Offering 23 of its shares for 10 of its acquisition target, Monte dei Paschi values Mediobanca's stock at roughly €15.992 each, a 5% premium to the close price of Jan. 23.
The equity of Monte dei Paschi was worth 8.7 billion euros as of the Jan. 23 close, while Mediobanca's market capitalization stood at at 12.3 billion euros, according to FactSet data.Under the offer terms, Monte dei Paschi estimates pre-tax benefits of 700 million euros a year from the transaction, which would help it to leverage tax credits from previous sustained losses and add 500 million per year for the next six years.
Feeling out of the loop? We'll catch you up on the Chicago news you need to know. Sign up for the weekly Monte dei Paschi, the world's oldest bank, required a state rescue in 2017 after years of crippling losses, but has turned the tides of its fortunes under the leadership ofveteran Lovaglio. The Italian government retains a 11.73% stake in the lender, after decreasing its position in a bid to reprivatize the lender.
MERGERS AND ACQUISITIONS BANKING ITALY FINTECH SHARE SWAP
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