Banca Monte dei Paschi di Siena SpA, the bailed-out Italian lender, is in advanced talks with at least three potential bidders for its consumer finance unit, people familiar with the discussions said.
After reviewing preliminary offers for Consum.it, Monte Paschi is allowing the firms to review the financial data of its consumer credit company, said one of the people, who asked not to be identified because the talks are private.
The Siena-based lender expects to receive binding offers for the unit, which has more than 5 billion euros ($6.8 billion) of loans, by the end of July, the people said.
The sale is part of the plan by Italy’s No. 3 bank to dispose of non-strategic assets as Chief Executive Officer Fabrizio Viola and Chairman Alessandro Profumo cut costs and reduce risk. The bank, which is engulfed in legal probes of alleged misconduct by former managers, yesterday started a 5 billion-euro share sale to partially repay 4.1 billion euros of state aid by the end of this year.
Monte Paschi, the world’s oldest bank, announced earlier today the sale of 500 million euros of bad loans to Fortress Investment Group LLC. Italian banks are exploring options to sell their bad loans at a time when expectations of an economic recovery has renewed appetite for these assets.
Consum.it’s potential buyers, which includes groups of firms, may bid for the whole company or just for its assets, the people said. A Monte Paschi spokesman declined to comment.
The finance unit posted a loss of 85.4 million euros in 2013, according to the firm’s annual report.
The sale is part of a disposal plan agreed with the European Commission to obtain state aid. “Should the market conditions not be favorable for an outright sale, the exit from such businesses could be achieved through a progressive deleveraging of assets,” the commission said in a Nov. 27 statement.