Intesa Sweetens Monte dei Paschi Offer With Extra Cash and Secures Key Investor Support

Intesa Sanpaolo increased its takeover bid for Monte dei Paschi by €800 million in cash while maintaining its primarily stock-based offer structure, raising the overall deal value to approximately €35 billion. The bank secured support from Delfin, which controls 17.6% of MPS, to vote against management's defense plan at an October 29 shareholder meeting. The enhanced bid hinges on MPS shareholders rejecting the rival proposal, giving the combined entity control of roughly 24-25% of Italian banking deposits and loans.

Intesa Sanpaolo's sweetened offer represents a significant escalation in competitive bidding for Monte dei Paschi. The addition of €800 million in cash marks a reversal of the CEO's earlier public stance against price increases, suggesting intensifying pressure to secure the deal. The transaction's structure—predominantly stock-based with modest cash components—allows Intesa to leverage its strong current valuation metrics, where elevated returns on equity support a price-to-book multiple well above historical averages.

The deal's progression now hinges on two sequential regulatory hurdles. The October 29 shareholder vote determines whether management's rival defense strategy survives, while Italy's antitrust authority must approve the combined entity's market concentration in the following weeks. The merged bank's projected 24–25% share of Italian banking deposits and loans may necessitate additional branch divestitures beyond the already-committed 635 locations, potentially reducing the strategic value Intesa receives at the agreed price.