Investing.com -- Monte dei Paschi di Siena is preparing twin all-share takeover bids for Banco Bpm SpA (BIT:BAMI) and Banca Generali (BIT:BGN) as it seeks to block an unsolicited acquisition attempt by Intesa Sanpaolo, according to a report from the Financial Times. A majority of the board at the Tuscan lender has backed the plan, which aims to forge an enlarged financial group boasting a combined market capitalization of approximately €70 billion.

Under the proposed structure, MPS would launch individual bids for Banca Generali, valued at nearly €8 billion, alongside Banco BPM, which carries a market valuation of just over €25 billion. The strategic blueprint also incorporates a prospective cash dividend distribution to bolster support among existing MPS shareholders.

The dual intervention marks a decisive escalation in Italian banking consolidation following Intesa Sanpaolo's unsolicited €36 billion tender offer for MPS in June. Should Intesa succeed, its restructuring plan entails dismantling the historic Siena institution by transferring central infrastructure and roughly half of its 1,260 branches to insurer Unipol while absorbing MPS's controlling stake in Mediobanca. MPS Chief Executive Luigi Lovaglio faces a challenging trajectory to execute the simultaneous transactions amid persistent fragmentation across the bank's board and shareholder base. Prior negotiations with Banco BPM regarding an informal merger of equals collapsed last month after major investor Crédit Agricole withheld its critical backing.

The current proposal has similarly proceeded without advance buy-in from either Crédit Agricole or Generali, whose participation remains pivotal to unlocking the broader deal architecture. In particular, Generali tendering its controlling stake in Banca Generali in exchange for MPS equity would inevitably draw rigorous oversight from independent directors under related-party transaction rules.

Despite mounting execution risks, Lovaglio's gambit aligns with Rome's strategic ambition to establish a formidable third domestic banking pillar capable of challenging Intesa and UniCredit. The Italian government, which initiated privatization efforts two years ago following MPS's 2017 state rescue, retains a minority stake as the multi-entity consolidation saga unfolds.

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