Economy Minister Giancarlo Giorgetti and Prime Minister Giorgia Meloni have emphasized that privatizing MPS could pave the way for the formation of a third major banking group in Italy, alongside Intesa Sanpaolo and UniCredit.

The Italian government is seeking a strategic buyer, preferably another Italian bank, to ensure MPS's future stability, a sentiment echoed by banking supervisors.

Long-term shareholders, such as banking foundations, are preferred over investment funds for MPS, but efforts to attract these buyers have not been successful.

Banco BPM has been identified as a suitable partner for MPS; however, its CEO, Giuseppe Castagna, has declined to engage in discussions despite the Treasury's outreach.

BPER, Italy's fourth-largest bank, is also considered a potential candidate for acquiring MPS, although there are currently no active negotiations.

Italy has already raised approximately 1.6 billion euros by reducing its stake in MPS, with a further 10% sale potentially generating around 640 million euros at current prices.

MPS shares have more than doubled in value over the past two years, complicating the attractiveness of the bank for potential buyers, especially rival banks.

Italy is under pressure to reduce its stake in Monte dei Paschi di Siena (MPS) from 26.7% to below 20% by the end of 2024 to meet EU re-privatisation commitments following a 2017 bailout.

The deadline for this sale was extended after Italy's unsuccessful attempt to sell MPS to UniCredit in 2021.

To comply with EU regulations, the sale must demonstrate that Italy no longer controls MPS, a stipulation that arose after the failed UniCredit deal.

Unipol, the leading shareholder of BPER, has shown conditional interest in acquiring a stake in MPS, depending on changes in its insurance partnerships.

The Treasury plans to conduct another market placement to sell shares to multiple investors, aiming to secure the highest possible price.