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Investing.com -- Italy’s Banca Monte dei Paschi di Siena (MPS) announced it has received the green light from the Italian government to proceed with its $14 billion takeover of peer Mediobanca (OTC:MDIBY).
This approval comes as some of MPS’s top shareholders signaled their support for the board’s acquisition bid.
The takeover offer was first launched unexpectedly by MPS in January. The bank’s goal is to establish a national diversified group by merging Mediobanca’s investment banking and wealth management operations with its own robust retail banking business.
The Italian state, which has been seeking a partner to transition the bank back to private ownership, backed the initiative. However, Mediobanca’s management opposed the unsolicited bid, arguing it would erode value for both banks’ shareholders.
MPS, recognized as the world’s oldest bank, disclosed on Monday that the government chose not to invoke its ’golden power.’ This power enables the government to veto significant decisions at companies of strategic national importance, effectively endorsing the acquisition.
This approval follows the European Central Bank’s authorization last Wednesday for MPS to issue new shares to finance the transaction. MPS’s shareholders are scheduled to vote on the deal at a meeting on Thursday.
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