The market rejects the start of the 2.5 billion euro capital increase of Mps. In fact, in Piazza Affari, the rights that allow to subscribe the new shares were sold hands down, confirming the coldness of investors towards Monte after disappointments of the last decade (and the mountain of billions burned after two capital increases) and the risks that, according to the prospectus, investing in Siena still entails.
The rights, now traded on the stock exchange, have fallen by 91.4% from 7.83 to 0.69 euros, while the shares, which restarted from 2.063 euros after the detachment of the right, have lost 2.7% to 2 , 0075 euros. Thanks to the use of the rolling method, which allows arbitrage between shares and rights, the typical anomalies of hyper-diluting increases were avoided, with the price of the shares expressed through the rights (€ 2.0054) in line with that of the share on the Stock Exchange .
What worries the banks in the guarantee consortium is the approach of the 2 euro threshold, below which it becomes cheaper to buy shares on the market rather than subscribe to those in capital increase. If the threshold were to be broken, the risk of a large-scale intervention to cover the unexercised would rise, forcing the institutions that assist Siena and Algebris to subscribe for shares up to 400 million euros and the sub-guarantors up to half a billion.
Axa has confirmed that it will inject, depending on the “investor demand”, “up to 200 million euros”.
As far as Mps is concerned, the transaction and the collection of the 2.5 billion euro functional to the plan prepared by Luigi Lovaglio should not be at risk, thanks to the guarantee on the unopted. However, receiving them largely from banks – which collect a 125 million fee to do so – rather than from investors, would not be a good calling card.
In this sense, the role of small savers who hold about 25% of the capital of MPS will be crucial. But they are also those who have seen all their investments in Mt. The Treasury has undertaken to pay the 1.6 billion relating to its share of 64.2% while the remaining 10-12% is in the funds portfolio.
The prospectus stretches several shadows on Siena, reporting the observations of the ECB for a business plan deemed too optimistic (the 2023 GDP is seen to grow by 2.5%, for example) and for the risks of a legal dispute of 7.5 billion euro, which could generate losses and erosion of capital ratios, whose projections to 2024, even after the recapitalization, – underlines the supervisory authority – are 150 basis points lower than the average of Italian banks.
Causes and capital are thus seen as possible “obstacles” to the merger that the CEO Lovaglio, who promises profits of 700 million before taxes in 2024, will have to try to close once the recapitalization is completed.
The Treasury must sell MPS “within the next two years” but “long before that deadline it will have to look for a partner”, recalled the secretary of Fabi, Lando Maria Sileoni. “There are those who, as usual, expect or think that Mps can be bought with one euro” or those who are candidates for the “white knight”, “two or three” banks that would take over Mps “to cover their own shortage of capital or deficit of coverage on non-performing loans, trying to make them look like MPs ». First, however, the increase must be closed: a “thriller to the last second”, for Sileoni, which evokes the clauses of the guarantee agreement that allow banks to withdraw if the success of the operation is threatened by “intensification of hostility” or by “negative changes” in the economic and financial situation.