(This story is an update to our story originally published on Oct. 15 2013)
Monte dei Paschi di Siena (BMPS IM) is close to signing a deal with Qatar Investment Authority (QIA) regarding the entry of the Sovereign Wealth Fund into the bank’s capital, two financial sources close to the matter told IntelliNews/Capitol Intelligence.
The sources said the talks have been led by Barclays PLC (BARC:LN) which has an important presence in Doha and detailed talks were already undertaken on the sidelines of the World Bank IMF Annual meeting held in Washington in early October.
The sources said entry of QIA into Monte dei Paschi is a very fluid following Monte dei Paschi’s board meeting on November 26 approving a EUR 3bn capital increase and ahead of an extraordinary shareholders’ meeting to held on December 27, 2013.
“There is a lot of activity going on but the talks are going well,” one financial source said. “The question right now is whether QIA underwrites only the capital increase but also acquires a stake from the Monte dei Paschi foundation.”
The Monte dei Paschi foundation that controls 33.5 percent of the bank said it would oppose the rights issue at the EGM if it were not delayed until May 2014 as it wants more time to sell part of its stake in the bank.
At the same time, movement is already underway regarding a merger between Unicredit (UCG:IMM) and Monte dei Paschi following informal talks between Monte dei Paschi chairman Alessandro Profumo and Unicredit Vice Chairman Fabrizio Palenzona in Rome.
Profumo and Palenzona held a series of one-to-one meeting on the sidelines of the Financial Times Future of Italy Summit held on November 18 in Rome. Palenzona represents one of Unicredit’s main shareholders’ Cassa di Risparmio di Torino. Both Profumo and Palenzona declined to comment when asked by Capitol Intelligence whether they were holding talks regarding a potential combination.
Interviewed by IntelliNews/Capitol Intelligence at the Trieste summit meeting between Russian President Vladmir Putin and Italian Prime Minister Enrico Letta, Unicredit chief executive Federico Ghizzoni said “no thanks” regarding a merger between Unicredit and Monte dei Paschi.
However, financial sources said that any merger between Unicredit and Monte dei Paschi would be led by Bank of Italy Governor Ignazio Visco in the same manner that than Bank of Italy governor Mario Draghi forced than Unicredit CEO Profumo to merge with troubled Roman bank Capitalia.
For the rights issue, UBS (UBS:US) will act as global coordinator and bookrunner, while Citigroup (C:US), Goldman Sachs International (GS:US) and Mediobanca – Banca di Credito Finanziaria S.p.A. (MB:IM) will act as co-global coordinators and joint bookrunners. Barclays, BofA Merrill Lynch (BAC:US), COMMERZBANK (CBK:GR), J.P. Morgan (JPM:US), Morgan Stanley (MS:US) and Société Générale Corporate & Investment Banking (GLE:FP) will also act as joint bookrunners.
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