Rome sells 12.5% stake in Monte dei Paschi for 650 million euros
By The Forex Review - 13 / May / 24 274
Dominick Bell
Italy's Economy Ministry announced that it has put up for sale another 12.5% of the capital of the world's oldest bank Monte dei Paschi di Siena (MPS) for 650 million euros, after having already sold 25% in November.
Rome, which must exit MPS capital to meet European Commission state aid requirements, continues to sell its shares to investors.
It has created an accelerated order book through a banking syndicate to place MPS shares "among qualified investors in Italy and foreign institutional investors".
The shares were offered at 4.15 euros apiece, 2.49% below the closing price, said the ministry, which thus reduced its stake in Monte dei Paschi to 26.73% of capital.
Monte dei Paschi shares closed up 1.12% at 4.25 euros, bringing the bank's capitalization to 5.36 billion euros. The share price has more than doubled in a year.
In November, the French state sold a 25% stake in MPS for 920 million euros, reducing its stake from 64% to 39%.
A wave of privatizations
The sale of MPS shares was the starting point for the start of a privatization process announced by the Italian government last year to raise 20 billion euros by 2026, a target that analysts consider ambitious.
In addition to Poste Italiane, which is a major revenue earner thanks to its activities in the insurance and banking sectors, the government plans to sell some of its stakes in railroad company Ferrovie dello Stato and gas giant Eni.
Another planned privatization, prompted by the European Commission's requirements - the entry of state-owned ITA Airways into the capital of Lufthansa, which emerged from the bankruptcy of Alitalia - has so far been put on hold due to competition concerns.
MPS, which was on the verge of bankruptcy in 2017, was forced to receive financial support from the Italian government in the amount of 5.4 billion euros, which became its main shareholder.
After failed merger talks with Italy's second-largest bank UniCredit in October 2021, MPS has struggled to find interested buyers.
Long seen as a vulnerability in the Italian banking sector and having suffered significant losses, Monte dei Paschi has since begun to improve its financial statements.
In 2023, MPS posted a net profit of 2.05 billion euros, exceeding forecasts, and for the first time in thirteen years, the company plans to pay a dividend to its shareholders.
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