Blitz by the Treasury which places a 25% share of MPS on the market, dropping in one fell swoop from 64.2% to 39.2% of the capital. The shares of the Sienese institute, once repudiated by the market, have been snapped up, to the point that the Mef, after having recorded a demand five times higher than the offer, was forced to increase the quantity put up for sale, initially equal to 20% of the capital.
The operation, structured through an accelerated order collection procedure, was entrusted to a consortium made up of Bank of America, Jefferies and Ubs “with the aim – we read in a note from the Mef – of promoting the placement of the aforementioned shares with qualified investors in Italy and foreign institutional investors” and “represents the first phase of the broader process that will lead the Mef to fully enhance the bank, in the interest of the same and of all stakeholders, in the context of the solid capital and income framework” of the the institute “and its prospects for further development”.
The hunger for shares allowed the Treasury to reduce the discount on the stock market prices at which the securities were offered from 6% to 4.9%. Compared to a guidance of 2.89 euros per share, the shares were placed at 2.92 euros allowing the Mef to collect 920 million, with a capital gain of 46% compared to the 2 euros at which, a year ago, it subscribed the ‘increase from 2.5 billion. The Treasury thus loses legal control of Monte, in whose shareholding the weight of institutional investors and large funds is growing, increasing the float, liquidity and attractiveness of the stock.
The sale also represents a strong signal to Brussels on the Treasury’s determination to respect the commitment to privatize Siena by the end of 2024, the deadline by which the extension granted by the EU to sell the stake should expire. But it could also serve as a negotiating weapon in case the Mef needed more time to find a partner, considering that at the moment the most popular candidates – Banco Bpm, Bper and Unicredit – all seem to be, for one reason or another , not wanting to settle in Siena.
The Treasury’s move follows a happy moment for Monte, fresh from 9 months closed with 929 million in profits, thanks to the restructuring work of CEO Luigi Lovaglio. The bank has returned to generating capital, with capital ratios among the highest in Italy (CET1 at 16.7%), and to being profitable, thanks to cost cutting, the cleaning of the loan portfolio from NPLs and the wind in its sails of rates, which caused the interest margin to take off. Positive news also arrived on the litigation front, with the acquittal of former leaders Giuseppe Mussari and Antonio Vigni in the derivatives trial, which led to the reduction of legal risks for information given to the market from 4.1 to 2.9 billion in the dark years of billions of losses.
The relaunch has translated into a ride on the stock market which has gained momentum in recent sessions. Since the publication of the quarterly report on November 8, the stock has risen by 18.5%, in the wake of market recognition for the bank’s progress, first with the rating increase by Fitch and then with the promotion of some brokers . A train that the Mef deemed appropriate not to miss, putting up for sale a much larger share than the one, between 5 and 15%, that the market expected, also facilitated by the increase in Moody’s outlook on Italy .
Just yesterday the analysts of one of the distributors, Bank of America, had raised the target price on Siena from 3 to 3.8 euros, focusing on the positive implications of an acquittal of Alessandro Profumo and Fabrizio Viola, on trial in Milan again for the affair of derivatives, could have for the bank, further reducing legal risks, freeing up 200 million in provisions, bringing forward the return to the dividend from 2025 to 2024 and accelerating the identification of a partner.
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2023-11-20 22:58:00
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