Intesa just bid $35.3 billion for Monte dei Paschi di Siena. That's the world's oldest bank. Founded in 1472. Survived the Black Death, Napoleon, two World Wars, and disco.
Could not survive Italian banking regulations.
The bank that watched the Medicis rise and fall now needs to be rescued by whoever writes the bigger check. BPM thought they had a deal. Intesa said "hold my espresso" and tripled the offer. Europe's second-biggest bank by market cap hangs in the balance.
Monte dei Paschi has been technically insolvent since roughly the invention of double-entry bookkeeping. The Italian government owns 64% of it. They've been trying to sell this anchor for years. Nobody wanted it. Now two banks are fighting over it like it's a Beanie Baby in 1998.
The asset is 551 years old. The due diligence alone requires carbon dating.
Intesa's unsolicited offer crashed BPM's courtship. Romantic, really. BPM brought flowers. Intesa brought a briefcase full of euros and a restraining order against BPM. This is how mergers work when the underlying asset smells like mothballs and sovereign debt.
The deal creates Europe's second-biggest bank. Second. All that money and drama for silver medal position. Might as well bid $35.3 billion to be the world's tallest dwarf.
Monte dei Paschi's stock probably moved on this news. Charts don't care. The 200-day moving average predates the printing press. Support levels were drawn in quill ink. Retail traders are frantically Googling "what is Siena" while their stop losses trigger on a bank that survived the Ottoman Empire but not Excel spreadsheets.
Italy's oldest institution finally found its value: being the rope in a corporate tug-of-war between two banks that apparently hate money.
Photo by on Unsplash
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