Monte Paschi Foundation to Sell Bank Stake to Fintech, BTG

Mar 31, 2014 9:02 am ET

(Updates with foundation stake in the third paragraph.)

March 31 (Bloomberg) -- Banca Monte dei Paschi di Siena SpA’s biggest shareholder agreed to sell a 6.5 percent stake to fund managers Fintech Advisory Inc. and BTG Pactual Europe LLP, loosening its grip on the bank it controlled for almost two decades.

The sale is subject to approval by the Bank of Italy and the Treasury, Fondazione Monte dei Paschi said in a statement today. Monte Paschi gained as much as 14 percent in Milan and was 7 percent higher at 27.04 euro cents as of 3 p.m., valuing the bank at 3.2 billion euros ($4.4 billion.)

Banca Monte dei Paschi, Italy’s third biggest bank, is planning a capital increase via a share sale by May at the earliest to help repay part of a 4.1 billion-euro government bailout before a European Union-imposed deadline of this year. The foundation, burdened by debt, had held up the capital raising while it disposed of its own shares in the Siena-based company.

“With this sale we’ve created a base of stable and strategic shareholders,” Antonella Mansi, the foundation’s chairman, said in a phone interview.

Today’s sale will reduce the foundation’s stake in Monte Paschi to about 5.5 percent, placing it as the second-biggest shareholder in Monte Paschi for the first time since 1995, when it was entrusted with the state-owned lender.

Fintech, based in New York, is buying a 4.5 percent stake in Monte Paschi, while BTG is purchasing 2 percent, for 23.75 euro cents a share.

The foundation has agreed to pledge a 2.5 percent stake in the lender to an investor pact with the two buyers. The three companies plan to maintain a combined 9 percent stake by buying shares in Monte Paschi’s planned rights offering.

Mansi said the foundation is reviewing what to do with its remaining 3 percent of Monte dei Paschi.

BlackRock Inc. would become Paschi’s biggest investor with a 5.75 percent holding, according to the website of Consob, Italy’s securities regulator.