Rome: Italian bank Mediobanca, itself battling to fend off a hostile takeover by a rival, announced on Monday a 6.3-billion-euro ($7.2 billion) bid to buy wealth management firm Banca Generali.
Mediobanca is planning to use its 13.1 percent stake in the insurance group Generali to pay for the acquisition of Banca Generali, the statement said.
"The combination between the two companies will produce a European market leader," Mediobanca stated as it looks to alight on a "unique opportunity" that would offer clients "an enhanced and excellent product range."
"A merger of Banca Generali and Mediobanca ... will allow the creation of a diversified group ... with well above-market growth perspectives," said Mediobanca general director Alberto Nagel in his institution's statement.
Mediobanca estimates synergies flowing from a link-up at 300 million euros, half of that stemming from reduced costs and the remainder from increased receipts.
Nagel told analysts Mediobanca had not consulted Generali or Banca Generali on a putative deal.
Contacted by AFP, Generali refused to comment.
Mediobanca is itself trying to fend off a hostile takeover by state-backed Banca Monte Paschi di Siena (MPS) as the Italian banking industry sees a wave of hostile merger bids.
Mediobanca's offer stipulates that if it does not manage to acquire a minimum of 50 percent plus one of the total number of Banca Generali shares, then it would abandon its takeover bid.
It said the takeover would result in its wealth management revenues doubling to two billion euros and such profits increasing fourfold to 800 million euros.
In January, Mediobanca rejected a 13.3-billion-euro bid from MPS, with its board branding the offer "devoid of industrial and financial rationale" and thus "destructive" for the bank.
That was despite backing from Prime Minister Giorgia Meloni's government for the move.
MPS, the world's oldest bank, had wanted to create a banking group to rival the two biggest in the country, Intesa Sanpaolo and Unicredit.
But the move resulted in MPS shares dropping more than eight percent while Mediobanca's jumped more than five percent.
MPS was bailed out by the Italian government in 2017, when it was on the verge of bankruptcy, and Rome became its main shareholder.
Mid-afternoon Monday, Banca Generali's shares were up 5.4 percent, MPS had gained 2.0 percent and Mediobanca 0.2 percent while Generali's had dropped 1.2 percent.
The Mediobanca offer would involve offering 1.7 Generali shares per Banca Generali share, which would equate to an 11.4 percent premium on where the latter's stood at Friday's close.
