Italy has sold a further 12.5% stake in bailed-out lender Monte dei Paschi di Siena, pocketing €650m and advancing plans to re-privatise the world's oldest bank after a failed first attempt in 2021.
The transaction, carried out through an accelerated bookbuilding procedure (ABB), is part of Rome's plans to raise roughly €20 billion from asset sales between 2024 and 2026 to curb the world's fourth-largest debt pile in relation to domestic output.
Commitments Italy agreed with European Union competition authorities at the time of the MPS bailout in 2017 bind Rome to bring the lender back into private hands eventually.
The Treasury placed the shares at €4.15 each, offering a 2.49% discount to yesterday's closing price, it said in a statement.
The price highlights the gains Italian banks have recorded thanks to higher rates and the restructuring progress MPS has achieved under CEO Luigi Lovaglio, who in November 2022 pulled off a make-or-break new share issue at €2.5 a share.
When settled, the transaction will reduce Italy's stake to 26.7% from 39.2%.
As part of the deal, Rome committed not to sell more MPS shares on the market for 90 days without consent of the global coordinators, the Treasury said.
Last November Italy sold an initial 25% stake in MPS through an ABB that raised €920m.
Both Economy Minister Giancarlo Giorgetti and Prime Minister Giorgia Meloni have repeatedly said that the government would try to boost competition among banks with the privatisation of MPS, signalling a preference for a merger with another mid-sized lender.
Back in 2021, the Treasury entered exclusive talks with UniCredit but Italy's second biggest bank eventually walked away from the deal.
The Treasury's insistence that any MPS sale must increase competition in the sector has raised the prospect of a potential deal with Banco BPM or BPER Banca, Italy's third and fourth largest banks respectively.
They have both said they are not interested in MPS.
Given the absence of interested buyers in the short term, share placements became the only way for the Treasury to cut its stake and work towards re-privatisation commitments, Reuters first reported in May.
