Monte dei Paschi di Siena is exploring a potential takeover of Banco BPM after "merger of equals" talks collapsed, aiming to counter Intesa Sanpaolo’s hostile bid. CEO Luigi Lovaglio is considering approaching Crédit Agricole, Banco BPM’s largest shareholder, though no contact has been made yet. Crédit Agricole’s CEO Olivier Gavalda said the French bank would analyse any solid project but doubts a combination would be value accretive for Banco BPM shareholders at this stage. If MPS proceeds, the deal could be structured as a share‑based merger negotiated directly with Crédit Agricole, limiting cash needs and depending on governance and board representation agreements.

The move faces internal resistance; MPS’s board is deeply divided, with four directors criticising Lovaglio’s approach and top shareholder Francesco Gaetano Caltagirone opposing a tie‑up with Banco BPM. Because MPS is subject to Italy’s passivity rule while Intesa’s offer is pending, any competing transaction would require shareholder approval at an extraordinary meeting. MPS, reporting first‑half results this week, said it has sufficient excess capital for acquisitions.

The situation marks the latest twist in a two‑month saga that began when Banco BPM approached MPS for a merger, only to be outbid by Intesa’s €30.6bn offer.