Milan: Mediobanca's board of directors on Tuesday rejected a 13.3-billion-euro takeover bid by smaller rival Monte dei Paschi di Siena (MPS).
"The Board of Directors of Mediobanca finds that the offer is devoid of industrial and financial rationale and is therefore destructive for Mediobanca," said the bank in a statement.
The reaction from Mediobanca's board comes four days after MPS launched a 13.3 billion euro bid for Mediobanca -- one which Mediobanca on Tuesday said would compromise its identity and business profile while destroying shareholder value for both companies.
The world's oldest bank, Monte dei Paschi (MPS) said its buyout offer was valued at 15.992 euros per share and was aimed at creating a "new national champion" within the Italian banking sector.
Mediobanca on Tuesday said the deal would entail a "significant weakening" of the bank's business model, specialized on wealth management and investment banking.
"The deal would generate no benefit whatsoever in these segments; rather, it would generate a significant deterioration in them," Mediobanca said.
It said the deal would result in an "immediate loss" of banking and financial clients and large corporate clients who would gravitate to international banks and specialist banks.
"The decline in the MPS stock market price following the offer announcement is proof of its fragility, making the deal highly unlikely to succeed," Mediobanca said.
Shares of MPS dropped 8 percent following the announcement.
MPS was bailed out by the Italian government in 2017 and has long been considered the weak link in the Italian banking sector, although it has begun a clear recovery.
