Paschi Gets Cerved Offer for Debt Unit, Fortress Said to Bid

Updated on
  • Fortress Investment’s DoBank said to submit binding offer
  • Buyer would manage $9.5 billion of Monte Paschi’s bad loans

Banca Monte dei Paschi di Siena SpA, the struggling Italian lender, received binding offers for its non-performing loans platform from Cerved Credit Management SpA and Fortress Investment Group, people with knowledge of the matter said.

Cerved made its bid on Tuesday after it was authorized by the board of directors, the Italian debt-servicing company said in a statement, without disclosing a price. Fortress’s DoBank SpA made the competing offer, according to the people, who asked not to be identified because the process is private.

Monte Paschi will choose a buyer by Nov. 24, the people said. The lender, which is being advised by Mediobanca SpA, will also transfer an 8.6-billion euro ($9.5 billion) loan portfolio to the buyer, along with the exclusive management of a portion of its future bad loans, the people said earlier.

Monte Paschi, which emerged from European stress tests released in July as the region’s weakest lender, is struggling to restore profitability and raise capital. Chief Executive Officer Marco Morelli, who took the job less than two months ago, is working to raise 5 billion euros of fresh capital and reorganize the business. Qatar Investment Authority is the most likely anchor investor in the recapitalization, injecting as much as 1.5 billion euros, the Italian newspaper MF wrote Tuesday.

The shares rose for a second-day, and were up 3.5 percent to 27 cents as of 10:57 a.m. in Milan trading, extending a 22 percent gain on Monday. The stock has fallen by 78 percent this year, compared with the 18 percent decline for the Bloomberg Banks and Financial Services Index.

The platform sale began in June, with the bank also offering management of its entire bad-loan book. It was withdrawn a month later with the announcement of a restructuring plan involving the securitization and sale of the troubled loans and a plan to replenish capital. The sale process, dubbed “Juliet,” resumed in September with a reduced amount of bad debt left in the unit for recovery, said the people. The loans form part of 27.7 billion euros of soured debt that the bank will securitize, they said.

Representatives for DoBank and Monte Paschi declined to comment.