Intesa's €35 billion bid for MPS wins backing of top investor

By Valentina Za MILAN, Oct 5 (Reuters) - Italy's biggest bank Intesa Sanpaolo moved closer towards securing its takeover target Monte dei Paschi di Siena after the largest shareholder in MPS agreed to accept Intesa's improved offer. Delfin, a family holding company that owns 17.6% of MPS, has committed to tendering its stake under Intesa's €35 billion ($39 billion) share-and-cash offer, Intesa said late on Sunday. Intesa's bid for MPS is the culmination of a hectic consolidation wave in Italian banking over the past two years.

Facing a challenge to its takeover ambitions by MPS CEO Luigi Lovaglio, who in August unveiled a complex defence plan, Intesa on Saturday said it would give MPS shareholders a further €800 million in cash if they reject the counter plan. The sweetener raises the bid's cash component of €3 billion by 25%, but represents an overall improvement of 2.3% based on Friday's closing price. Under Italian takeover rules, investors must authorise any defence strategy that could block a bid.

Lovaglio has asked shareholders to approve his plan at an October 29 meeting. He said recently they should do so even if they intend to tender their shares to Intesa. An alternative scenario to Intesa's takeover would keep the pressure up and potentially extract better terms, he said.

But late on Saturday Intesa said it would withdraw its bid if MPS shareholders approved the defence strategy on October 29. That means shareholders must reject it if they want to get the sweetened offer. Delfin, the financial vehicle of the Del Vecchio family, which controls the world's largest eyewear company EssilorLuxottica, has committed to rejecting Lovaglio's plan on October 29, Intesa said. ($1 = 0.8939 euros) (Reporting by Valentina Za, Editing by Louise Heavens)

Source: Euronext Markets