Suryaa Business Desk: The independence reign of the world's oldest bank with a long history of more than five and a half centuries is coming to an end. From Italy... The independence reign of the world's oldest bank with a long history of more than five and a half centuries is coming to an end. Italy's historic 'Banca Monte dei Paschi di Siena' (Banca Monte dei Paschi di Siena MPS) bank is taking steps towards losing its existence. The Monte di Paschi CEO's defensive strategy to fend off a hostile takeover bid from Intesa Sanpaolo, the country's largest bank, has failed.
The proposal was rejected by shareholders, causing a stir in Italy's banking sector. Monte di Paschi CEO Luigi Lovaglio has made an exchange offer to buy Banco BPM, another mid-sized bank, in an attempt to fend off Intesa's massive 33 billion euro (about $36 billion) takeover bid. But this protection plan did not get the necessary stakeholder support. In the recent key meeting, 91 percent of the shareholders unanimously opposed the CEO's proposal. With this, Monte di Paschi's efforts to remain independent were thwarted.
A lack of shareholder support has paved the way for Monte di Paschi's permanent transfer to Intesa Sampaolo, Italy's largest bank. It is remarkable that the European Central Bank (ECB) has already given permission for this massive merger process. Meanwhile, as part of this deal, Unipol will merge and revive Monte di Paschi brands and other regional banks with its BPER company, market sources revealed. The fact that the world's first bank, which started as just a small pawnshop in the city of Siena, Italy in 1472 and survived centuries of wars, financial crises, and epidemics, has become a topic of discussion in financial circles. This ancient institution, which at one stage emerged under government protection, today has lost its independent existence in a flurry of corporate mergers that has come as a shock to the global banking sector.
