Bidding War Intensifies for World’s Oldest Bank as Intesa Challenges BPM Offer
Italy’s biggest lender has thrown a grenade into the country’s banking landscape. Intesa Sanpaolo on Monday launched an unsolicited takeover bid of 30.6 billion euros ($35.3 billion) for Monte dei Paschi di Siena, hoping to sideline rival Banco BPM and position itself as Europe’s second-biggest bank by market capitalisation.
The Intesa Sanpaolo Monte dei Paschi bidding war was sparked barely 24 hours after BPM made its own move. Banco BPM’s board had unanimously approved a plan to approach MPS about a so-called “merger of equals,” only for Intesa to immediately counter with a formal, unsolicited offer carrying a premium. Under Italian takeover rules, Intesa’s formal bid now prevents MPS from agreeing to a deal with BPM without prior shareholder approval, effectively forcing a full contest.
Intesa said its proposal would create the second-largest bank in the eurozone by market value, with a network of 3,000 branches, arguing that “the financial and banking sector, both at the Italian and European level, requires a consolidation process that creates large-scale projects capable of supporting the necessary investments.”
At the centre of this war is a bank unlike any other. Monte dei Paschi di Siena traces its history back to 1472, when it was founded as a monte di pietà , an early form of organised charity intended as an alternative to moneylenders. After a reform in 1624, the institution took its current name and is today considered one of the earliest examples of modern retail banking. The Italian state bailed MPS out in 2017 and reprivatised it between 2023 and 2024, after which it became a target for domestic merger activity, particularly after it emerged as the main investor in insurer Generali, a coveted asset in Italian finance.
Intesa’s offer outlined a 12.5% premium versus MPS’s closing share price on Friday, which gave MPS a market value of €27.4 billion. Markets reacted sharply to the Intesa Sanpaolo Monte dei Paschi bidding war announcement, with shares in Intesa and Banco BPM falling 4% and 1.1% respectively, while MPS shares climbed 0.9% in early Monday trading.
The financial ambitions are bold: the combined group aims for a net profit above €16 billion by 2029, with return on equity expected to exceed 20% and a Common Equity Tier 1 ratio above 14%. Total shareholder distributions for the 2025–2029 period are estimated at approximately €61 billion, compared to approximately €50 billion under Intesa’s existing plan.
The outcome will depend heavily on shareholders. Key votes rest with major investors including Delfin, which holds 17.5%, Francesco Gaetano Caltagirone with 13.5%, Banco BPM with 3.7%, and the Treasury with 4.8%. The direction of passive and active funds, from BlackRock to Vanguard to Norges Bank, which together control approximately 30% of the Sienese bank’s capital, will also be decisive.
The broader political backdrop adds another layer. Prime Minister Giorgia Meloni and her officials have repeatedly said they would like Monte dei Paschi to become Italy’s third-largest bank by assets, behind Intesa Sanpaolo and UniCredit. UniCredit itself is meanwhile locked in its own pursuit of Banco BPM and Germany’s Commerzbank, making this one of the most turbulent moments in European banking in years.
MPS said it would not comment on either Intesa’s or BPM’s proposals until its board convenes to evaluate them. For now, Italy’s oldest institution, and arguably its most storied, sits at the eye of a storm that will determine the future architecture of European banking.
