(Recasts with statement, details)
By Silvia Aloisi
MILAN, March 18 The top investor in Monte dei
Paschi di Siena halved its stake in Italy's third
biggest lender to 15 percent to pay off its debts ahead of a
3-billion euro ($4.2 billion) capital increase the bank needs to
The Monte dei Paschi foundation, a not-for-profit entity
which held just under a 30 percent stake in the bank, said in a
statement issued at the request of the market watchdog that it
had sold a 12 percent stake after the market close on Tuesday.
It said it now held a 15.07 percent stake following sales of
small holdings on the market on Tuesday and in previous days.
The proceeds of the stake sale will be used to completely
clear its debts of around 300 million euros with a pool of
banks, it said.
The foundation did not say who had bought the shares and
gave no financial detail about the transactions, which mark the
end of an era for a politically-connected body that until early
2012 had nearly 50 percent of the eponymous bank.
The type of operation would suggest that more than one
player bought the shares, according to a source close to the
situation. In any case, investors buying a stake of more than 2
percent in a listed Italian company must inform the local market
regulator within five days of the purchase.
Monte dei Paschi, the world's oldest bank still in business,
was bailed out by the state with 4.1 billion euros ($5.7
billion) of aid last year after being hit by the sovereign debt
crisis and a derivatives scandal.
It needs to carry out the capital increase to pay back most
of the state aid as part of a tough restructuring demanded by
the European Commission, or else would face nationalisation.
The foundation, which has close ties to local politicians in
Monte dei Paschi's home town of Siena, had been looking for
months to sell down its stake to reimburse debts before the bank
launches its share sale, expected at the end of May.
Earlier on Tuesday, two sources close to the situation told
Reuters the Monte dei Paschi foundation was placing an 8.5
One of the sources said investment bank Morgan Stanley was
handling the transaction and a Milan trader said the placement
was carried out at a price of 0.2337 euros per share. Morgan
Stanley declined to comment.
The foundation was rumoured to have sold an 8 percent stake
to U.S. hedge fund Och-Ziff Capital Management on March
5, sending the bank's shares up 20 percent on the day. However,
both the foundation and Och-Ziff denied the sale on March
Tuesday's share sale could prompt another rally in the
banks' stock price as it removes an element of uncertainty and
could possibly even fuel takeover speculation.
The cash-strapped foundation had forced the bank to delay
the capital increase, part of a tough restructuring demanded by
the European Commission, to beyond mid-May from January because
it needed more time to find buyers for its stake.
Given that it is unlikely to take part in the share sale,
the foundation is set to see its holding in the bank diluted to
just a fraction of its current stake.
($1 = 0.7188 Euros)
(Additional reporting by Paola Arosio and Andrea Mandala in
Milan, Stefano Bernabei and Giuseppe Fonte in Rome; Editing by
David Evans and Chris Reese)