Italy confident in MPS deal in October – sources


  • Parties are not expected to announce the deal until after the October 3-4 vote
  • Sale meets resistance from ruling lawmakers
  • UniCredit has set strict conditions for purchasing selected parts of MPS

ROME, September 24 (Reuters) – Italy’s Treasury is confident it will be able to announce a deal to sell parts of state-owned Monte dei Paschi (MPS) (BMPS.MI) to rival UniCredit ( CRDI.MI) next month, four sources familiar with the matter told Reuters on Friday.

A slowdown in talks ahead of an October 3-4 vote in the MPS’s hometown of Siena to fill a vacant parliamentary seat had cast doubt on the chances of a deal, weighing on the Tuscan bank’s riskier debt this week.

Italy’s No.2 bank UniCredit agreed on July 29 to start exclusive negotiations with Rome over MPS, 64% state-owned following a 2017 bailout that cost 5.4 billion d euros to taxpayers ($ 6.3 billion).

Three of the sources said the parties have yet to exchange a full set of figures on the final terms of the deal, which Rome will have to go through to European Union authorities to ensure it respects the rules. on state aid to banks.

Parties are only expected to show their hands fully after the October vote, which could lead Democratic Party leader, a member of Prime Minister Mario Draghi’s coalition, to resign if he does not win the seat in Siena.

UniCredit declined to comment.

Italy has set aside € 1.5 billion to recapitalize MPS in light of the sale, but two of the sources said it was too early to put a final amount on the cash call. It could even be lower than expected, according to a source.

The cost of reprivatization and the prospect of thousands of early departures of MPS staff prior to the sale have fueled political opposition to the deal.

Lawmakers from the right-wing League party on Friday said it would be a mistake to sell the world’s oldest bank at lower prices, as MPS workers went on strike in support of union demands to gamble a role in the talks.

UniCredit (CRDI.MI), which discussed an MPS deal with the Treasury under former CEO Jean Pierre Mustier, will only consider an acquisition that leaves its capital cushions unchanged and increases earnings per share by 10% .

The new CEO of Unicredit, Andrea Orcel, wants to increase the presence of the lender in Tuscany, Lombardy, Emilia Romagna and Veneto, while leaving behind the branches of MPS in the poorest south of Italy – as well as any problem or loan at risk and legal risks resulting from mismanagement.

($ 1 = 0.8540 euros)

Reporting by Giuseppe Fonte and Valentina Za in Milan, additional reporting by Francesco Zecchini in Rome, editing by Gavin Jones and Louise Heavens

Our Standards: Thomson Reuters Trust Principles.


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