Italy's largest bank wants to buy rival

The major Italian bank Intesa Sanpaolo wants to take over its domestic rival Banca Monte dei Paschi di Siena for just over 30 billion euros. Monte Paschi shareholders will be offered one euro in cash and 1.6 treasury shares, as Intesa announced in Turin on Monday. This would value a Monte Paschi share at just over ten euros. This is a premium of 12.5 percent compared to the closing price on Friday. The offer values the Monte Paschi shares at a total of around 30.6 billion euros.

Intesa is thus countering a move by the much smaller Banco BPM, which announced at the weekend that it wanted to merge with Monte Paschi. Banco BPM had not mentioned the value of the potential offer for Monte Paschi. It had merely stated that the merged bank would have a combined market capitalization of more than 50 billion euros. Banco BPM only has a market capitalization of around 20 billion euros.

Intesa, on the other hand, is significantly larger with a market capitalization of just under 100 billion euros.