Paschi, Investors Coordinated to Buy Mediobanca, Prosecutors Say

(Bloomberg) — Banca Monte dei Paschi di Siena SpA Chief Executive Luigi Lovaglio and two prominent Italian investors allegedly coordinated actions to seize control of Mediobanca SpA and tighten their grip on Assicurazioni Generali SpA, according to documents compiled in an investigation by Milan prosecutors.

Prosecutors have described an alleged multi-year strategy by billionaire Francesco Gaetano Caltagirone, one of Mediobanca and Generali’s biggest investors, and Delfin Sarl Chairman Francesco Milleri to gain control of the Milan-based investment bank, with the ultimate goal of controlling Generali, Italy’s largest insurer.

One key step in the plan was the purchase of Monte Paschi shares by the Italian government last year, part of a process that prosecutors described as orchestrated and lacking in transparency.

According to the 35-page document seen by Bloomberg, Caltagirone and Milleri, in coordination with Lovaglio, made a deal after the acquisition that allowed Monte Paschi to acquire Mediobanca, but did not fully disclose their compliance with the market, to the potential detriment of other investors.

Prosecutors allege that the project was carried out in violation of Italian market rules and coordinated behavior that could have affected Mediobanca’s share price.

Monte Paschi completed its 17 billion euro ($19.7 billion) acquisition of Mediobanca in September, becoming Italy’s third-largest lender by assets in a government-backed deal.

Milan prosecutors are investigating allegations of market manipulation by Lovaglio, Milleri and Caltagirone and regulatory obstruction of Monte Paschi’s takeover of its smaller rival. Prime Minister Giorgia Meloni’s government and the Finance Ministry in Rome are not under investigation and no individuals or companies have been accused of wrongdoing.

Prosecutors allege the secret coordination meant participants did not have to pool their shares, allowing them to avoid having to launch a costly, mandatory cash takeover bid once their total stake exceeded the 25% threshold in Mediobanca.

Monte Paschi said in a statement on Thursday that the bank was “confident that it will be able to provide all the information necessary to clarify the correctness of its actions.” Delfin said the board “always acted in full compliance with market rules and laws.” Caltagirone Group said its representatives “consistently acted in accordance with the rules regulating the market”.

When contacted by Bloomberg after business hours on Saturday, everyone declined to comment further.

Documents trace the project’s origins back almost a decade.

Delfin and the Caltagirone group have been significant shareholders since at least 2016. They allegedly took control through parallel and coordinated investments in both Generali and its main shareholder, Mediobanca, starting in 2019.

Mediobanca is Generali’s largest shareholder, with a 13.2% stake. Delfin, the Del Vecchio family’s holding company, owns 10.1 percent of the insurance company, while Caltagirone controls 6.3 percent, according to Generali’s website.

Delfin also owns a 17.5% stake in Monte Paschi, while Caltagirone owns a 10.3% stake, making them among the bank’s largest shareholders, and both built up sizeable positions in Mediobanca before committing their shares to the offer.

Overlapping interests created a dense web of influence linking its main shareholder, Mediobanca, Italy’s largest insurance company, with Monte Paschi, the vehicle used in the takeover.

Investigators claim that the two camps are gradually converging, with shares in Generali and Mediobanca rising rapidly and voting behavior becoming increasingly harmonious.

The strategy entered its final phase in November 2024, when the Italian Treasury sold a 15% stake in Monte Paschi through accelerated bookbuilding, according to documents, some elements of which were previously reported by Corriere della Sera.

Prosecutors say the sale was structured to favor buyers in line with the Mediobanca takeover plan (i.e., Caltagirone and Delfin, who offered the same price for the same number of shares within minutes of each other).

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Although the Ministry of Finance and its representatives are not under investigation, the document touches on the government’s role, arguing that the sale was characterized by “opacity and anomalies”.

The sale appeared to be to pre-arranged buyers, raising questions about potential conflicts of interest given Treasury’s dual role as both the seller of shares and the final backer of Monte Paschi’s bid, according to court documents.

Italy’s Finance Ministry acted in accordance with rules and procedures, an official told Bloomberg on Saturday when asked to comment on the investigation.

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