This much is clear about Italy’s Banca Monte dei Paschi di Siena: It is beautiful. Stunning, really. As pretty as it is venerable—being, as it is, the oldest continually operating bank in the world. Truly, it takes your breath away. Especially if you are thinking about buying it.
UniCredit and the government came to odds over how much new capital would have been needed to make the deal palatable to UniCredit. The Milan-based bank asked the Treasury to recapitalize Monte dei Paschi with around 7 billion euros, equivalent to $8.15 billion, for the deal to go through, while the Treasury was willing to pay only up to €5 billion, according to one person familiar with the talks…. Many Italian politicians complained that the terms requested by UniCredit would have resulted in a “fire sale” of the Siena-based bank, at an excessive cost to the Italian government.
Speaking of taking breaths away, without UniCredit taking on the non-cursed parts of MPS, which include the exquisite palazzo pictured about, the world’s most fetching financial services operation may once again be drawing its last inhalations, and any plans for next year’s big 550th birthday party are very much in doubt.
UniCredit has been the only suitor that seriously considered the purchase of the Tuscan bank so far…. After the bank teetered near failure for years, Rome stepped in to nationalize it, spending €5.4 billion, equivalent to more than $6 billion at the time, promising European regulators it would resell the bank by early 2022.
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