MPS towards privatization, waiting for a new banking risk

A quality parterre for MPS, they responded to the Mef’s offer over a hundred fundsboth those with long-term and hedge strategies, and above all from abroad and all with small shares, most under 1 percent.

Thus the first step towards privatisationwhich leads the Mef to drop from 64.23% to approximately 39.23% of the share capital of the Sienese institute, is configured as a pure market operation, without an ‘industrial’ operator, which makes people bet on possible M&A operations and allows the Treasury to keep the promises made to the EU to exit the capital and raise cash in view of the coverage necessary for the 2024 maneuver (approximately 920 million euros, with a price per share almost 50% higher than the subscription price of the increase in the bank’s share capital carried out in November 2022 when it had invested 1.6 billion).

“Now full speed ahead – thunders the deputy prime minister and minister Matteo Salvini – with MPS as the protagonist in consolidating the Italian banking system in favor of small and medium-sized enterprises” almost as if to suggest the hypothesis of a third banking hub, which the unions are against instead. As for further placements, they are not excluded, even if on the ‘if’ and ‘when’ everything will depend on market conditions, there is no procedure to follow and the line chosen by the Mef is to wait for the best moment for maximum public interest.

In the heat of the moment the stock on the stock exchange lost 7.94% to 2.83 euros, falling below the price set for the placement (2.92 euros with a discount of 4.9% on Monday’s closing) but the operation was not entirely unexpected, Equita points out, considering the recent strong performance of the stock (+30% in the last month), supported as well as the operational improvement of the bank, the reduction of the petitum of extraordinary risks (the appeal ruling on the Viola-Profumo case will be on 27 November), the recent double upgrade by Fitch on the issuer and the improvement of the outlook by of Moody’s on the sovereign rating.

Lthe transfer of 25% will then facilitate any M&A operations, analysts suggest, as it will allow the MEF to attend the wedding with a less cumbersome fee. Finally, it is “a good signal” towards the European authorities, which can be relied upon even if a new extension has to be negotiated. “The government – Intermonte analysts hypothesize – should now be able to ask for a postponement to 2025 for the definitive exit from MPS, i.e. the sale of the residual 39.2% stake (for which a ‘lock up’ of 90 days)”. The ‘if’ and ‘when’ for new placements will depend on market conditions, there is no procedure to follow and the line chosen by the Mef is to wait for the best moment for maximum public interest.

This first call was responded to by, among others, some Italian managers who had already signed up to the capital increase, such as Algebris, Anima, Eurizon, Fideuram and Mediolanum, but also new names such as Kairos and Azimut; among the large international funds, those that should have taken ’round’ shares include Wellington, Tosca Fund and Norges.

The funds and foundations, however, which had carried out a systemic operation with the Mef, remained out of the game.

This first move, according to some observers, could open the season of privatisations, one of the ‘arrows’ that the minister Giancarlo Giorgetti has recalled he has for his bow to find resources for the maneuver even if, he has repeatedly recalled, on a horizon over many years and at the right time. Among the State subsidiaries, the latest privatization initiatives have involved Enav (53.28%), Enel (23.58%), Poste Italiane (29.26% in addition to 35% through Cdp) and Ferrovie dello Stato for which they are preparatory activities for privatization have been outlined; but the Mef is also present in Eni (4.34%, in addition to 25.76% through Cdp) and Leonardo (30.20%).

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