Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Italy confident in MPS deal in October - sources

EconomySep 24, 2021 18:56
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: View of the entrance to the headquarters of Monte dei Paschi di Siena (MPS), the oldest bank in the world, which is facing massive layoffs as part of a planned corporate merger, in Siena, Italy, August 11, 2021. REUTERS/Jennifer Lorenzini/File 2/2

By Giuseppe Fonte and Valentina Za

ROME (Reuters) -Italy's Treasury is confident it will be able to announce a deal to sell selected parts of state-owned bank Monte dei Paschi (MPS) to rival UniCredit next month, four sources close to the matter told Reuters on Friday.

A slowdown in talks ahead of a vote on Oct. 3-4 in MPS' hometown of Siena to fill a vacant parliamentary seat had raised doubts over the chances of an agreement, weighing on the Tuscan bank's riskier debt this week.

Italy's No.2 bank UniCredit agreed on July 29 to enter exclusive negotiations with Rome over MPS, which is 64% owned by the state following a 2017 bailout that cost taxpayers 5.4 billion euros ($6.3 billion).

Three of the sources said the parties had yet to exchange a comprehensive set of figures on the final terms of the deal, which Rome will need to run past European Union authorities to ensure it complies with rules on state aid to banks.

The parties are expected to show their hands in full only after the October vote, which may prompt the leader of the Democratic Party, a member of Prime Minister Mario Draghi's coalition, to resign if he fails to win the Siena seat.

UniCredit declined to comment.

Italy has set aside 1.5 billion euros to recapitalise MPS in light of the sale, but two of the sources said it was too early to put a number on the final size of the cash call. It could even be lower than the sum earmarked, one source said.

The cost of the re-privatisation and the prospect of thousands of early staff exits at MPS ahead of the sale have fanned political opposition to the deal.

On Friday, lawmakers in the right-wing League party said it would be a mistake to undersell the world's oldest bank, as MPS' workers went on a strike to back unions' demands to have a role in the talks.

UniCredit, which had discussed an MPS deal with the Treasury under previous CEO Jean Pierre Mustier, will only consider an acquisition that leaves its capital buffers unaffected and boosts earnings per share by 10%.

New Unicredit (MI:CRDI) CEO Andrea Orcel wants to grow the lender's presence in Tuscany, Lombardy, Emilia Romagna and the Veneto, while leaving behind MPS' branches in Italy's poorer south - as well as any problem or risky loans and legal risks stemming from mismanagement.

($1 = 0.8540 euros)

Italy confident in MPS deal in October - sources
 

Related Articles

What people are saying about China Evergrande Group
What people are saying about China Evergrande Group By Reuters - Oct 22, 2021

HONG KONG (Reuters) -China Evergrande Group has supplied funds to pay interest on a U.S. dollar bond, a person with direct knowledge of the matter told Reuters on Friday, days...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email