Monte dei Paschi sets share sale terms after securing banks’ support


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MILAN — Italy’s Monte dei Paschi di Siena (MPS) has set the terms of a share sale to raise up to 2.5 billion euros ($2.4 billion) after securing support from a group of banks that will pick up unsold stock in the state-owned lender.

MPS has struggled to secure underwriters for its seventh share issue in 14 years, forcing it to race until the very last minute to gather pre-commitments from investors to limit risks for the banking consortium.

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It said in a statement on Thursday just minutes after receiving the signature of the last bank to join the guarantee consortium that underwriters would cover up to 807 million euros.

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Based on its 64% stake in the bank it rescued in 2017, the state will put in 1.6 billion euros towards the capital raising.

The rest must come from private investors to meet European Union rules on state aid to lenders.

The bank will offer a 7.79% discount on the new shares over the theoretical ex-right price (TERP) of existing MPS shares.

The minimal discount, a fraction of what is customary in such deals, is a result of MPS’ shrunken market capitalisation of just 257 million euros in relation to the issue’s size. (Additional reporting by Francesca Piscioneri; Editing by Jan Harvey and Mark Potter)


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