Norway's Wealth Fund Supports Monte dei Paschi's Share Issue for Mediobanca Acquisition

By Reuters

Milan, April 12, 2025 – Norges Bank Investment Management (NBIM), the entity managing Norway’s sovereign wealth fund, has announced its support for Monte dei Paschi di Siena’s (MPS) proposed share issue. This plan is aimed at financing MPS’s hostile bid for rival Italian bank Mediobanca.

In a statement on its website, NBIM outlined its voting intentions for MPS’s upcoming shareholder meeting scheduled for April 17. Currently, the Norwegian fund holds a 2.6% stake in MPS, an increase from 2.34% at the end of 2024. NBIM also retains a 1.45% stake in Mediobanca, as detailed in its latest records.

Monte dei Paschi, the world’s oldest bank, is partially state-owned, with the Italian government holding an 11.7% stake. The state intervened in 2017 to rescue MPS by acquiring a 68% stake at that time.

The plan for merging MPS with Mediobanca aims to leverage each bank’s strengths: MPS’s consumer finance services combined with Mediobanca’s expertise in wealth management and investment banking. However, Mediobanca has raised concerns that the merger may dilute value for investors, despite assurances from MPS that it intends to maintain the Mediobanca brand and operate it independently under a separate CEO.

The outcome of the shareholder vote is uncertain. While a contingency of Italian shareholders is likely to back the merger, the final decision could depend significantly on the positions of various international investors who have bought into MPS as the state reduced its ownership stake.

In a separate development, CPP Investments, which oversees Canadian pension funds, has stated its intention to oppose the share issue intended for the Mediobanca bid. As of the last annual meeting, CPP Investments held approximately 0.7% of MPS.

As the financial community watches closely, the results of this impending vote could significantly impact the structures and future of both banks involved.

Reporting by Valentina Za in Milan; Editing by Terje Solsvik and Crispian Balmer