Italy Hasn't Privatized Monte dei Paschi - It's Been Slow-Liquidating It

The Italian government's exit from Monte dei Paschi di Siena would end one of the longest-running government rescues of a European bank - a saga that stretches back to 2017, when Rome put €5.4 billion into the world's oldest operating bank to keep it from collapsing.

Nine years later, the government is still selling shares in small, semi-private batches to a handful of connected Italian buyers. The latest tranche, in July, moved another 15 percent for €1.09 billion. Depending on which source you trust, the Treasury still holds somewhere between 5 percent and 11.7 percent of the bank. (The two numbers come from different weeks, different counts, and the same opaque process. That's part of the point.)

The basic thing to understand is that this isn't really a privatization. It's a slow-motion divestment that has been running on a different set of plumbing rules than a normal state exit. The mechanism doing the work is called accelerated bookbuilding - ABB, in Italian banking shorthand. On paper, it's a way to place shares in the public market quickly. In practice, over the course of this divestment, it has functioned closer to a private placement to a short list of domestic institutional buyers.

That's why prosecutors in Milan are looking into it.

The November 2024 sale went to four buyers: Banco BPM (5 percent), fund manager Anima (3 percent), construction tycoon Francesco Caltagirone (3.5 percent), and the holding company of the late Ray-Ban founder Leonardo Del Vecchio (3.5 percent). The sale was coordinated and book-run by Banca Akros, the investment banking arm of Banco BPM.

Yes, one of the buyers ran the placement for the government.

Milan prosecutors have fetched documents from Banca Akros's offices. The broker says it acted properly and transparently. The Treasury said the same thing. The Financial Times reported earlier that UniCredit was unable to buy a 10 percent stake because a call to Akros was never returned, and the ministry dismissed the report as groundless. But the investigation exists for a reason. When a government sells its own bank's shares through its buyer's own broker, to a group of four connected Italian players at a premium to the market price, the optics are exactly the kind of thing that makes prosecutors curious.

The July 2026 sale went to essentially the same cast. Banco BPM picked up another 5 percent - though it says it won't cross the 10 percent threshold, a disclosure line that triggers reporting obligations and political scrutiny. Anima grew to 4 percent. Caltagirone and EssilorLuxottica (Del Vecchio's company) each took 3.5 percent. Another €1.09 billion. Same mechanism. Same buyers, slightly rearranged.

Here's the other thing that makes the story stranger. While the government is slowly liquidating its stake, the bank itself is being reshaped by two massive structural moves at once.

In 2025, MPS completed a €16 billion takeover of Mediobanca, one of Italy's most powerful merchant banks - a firm that has sat at the center of Italian corporate finance for decades. MPS now holds roughly 86 percent of Mediobanca, and in March 2026 the two banks approved a full merger plan to absorb the remaining 14 percent and take Mediobanca private. MPS will issue up to €1.6 billion in new shares, swap them at a ratio of roughly 2.45 MPS shares per Mediobanca share, and fold Mediobanca's investment banking and private banking operations into a dedicated unlisted subsidiary that keeps the Mediobanca brand.

In June 2026, Intesa Sanpaolo - Italy's largest bank - launched an unsolicited €30.6 billion cash-and-share bid for MPS. The deal would make Intesa the eurozone's second-largest lender, behind only Santander. Under Intesa's plan, half of MPS's retail network would be sold off to Unipol and combined with another bank, BPER, to create a new entity that still wears the Monte dei Paschi name. Banco BPM, the buyer from the government's latest tranche, had separately invited MPS to a "merger of equals" the day before Intesa's offer.

So the government is selling the last slices of a bank that is simultaneously being absorbed by its former prey and courted by its largest rival, while the buyers of those slices are also participants in the takeover bidding war.

The funding model problem here is the one that explains everything else. MPS was rescued in 2017 after years of bad loans and governance failures. The European Commission approved the bailout. The government then became the bank's majority shareholder and promised to return it to private hands. The earlier tranches brought in dozens of foreign funds, but the government apparently wanted a stable core of domestic shareholders - which is what pushed the process toward the ABB structure and the small group of connected Italian investors.

The result is a divestment that looks less like a privatization and more like a series of structured deals to a private club. The premium-to-market pricing that the Treasury cited as good for taxpayers is also the feature that made the process look suspicious enough for prosecutors to show up.

The Italian government's own language captures the tension. Prime Minister Giorgia Meloni said in March that the state's involvement with MPS has ended and the remaining stake doesn't give the government governance influence. Economy Minister Giancarlo Giorgetti said in June, "We have to get out of Monte dei Paschi and figure out who offers us the most." In July, the same minister confirmed the latest sale.

The simplest model is this: the Italian government holds the last few percent of a bank it has been selling for three years, and it wants to clear the balance sheet. But the buyers who are buying those slices are the same buyers who are negotiating the future of the bank's corporate structure. Banco BPM has told the government it won't exceed 10 percent - which is the threshold where a shareholder starts asking questions at the board level and where the Italian banking regulator starts paying attention.

That threshold is the real story. Not the headline about an exit date, but the fact that the government's last buyers are positioning themselves at the edge of a line that separates "passive investor" from "someone who can change the deal." They are buying government shares in one hand while participating in takeover bids with the other.

Whether September comes or not, the machine is the same: a state liquidating a rescued bank through a narrow channel of connected buyers, in a market where those buyers are also the ones writing the next chapter. The question isn't whether Italy exits. It's whether the exit was just the last step in a repositioning that started years ago.