ROME/MADRID (Reuters) - Spanish bank giant Santander has agreed to sell Antonveneta before it has even bought it, snapping up a $13.2 billion offer from Banca Monte dei Paschi di Siena that hands it hefty gains and creates Italy's No.3 lender.
The deal enlivens Italy's banking consolidation, which many analysts had thought was nearly over after the birth of two domestic bank giants this year, and gives Monte Paschi more clout on its increasingly competitive home turf.
Santander is in the process of acquiring Antonveneta as part of a three-way break-up bid for Dutch ABN AMRO, in which the Italian bank was valued at about 6.6 billion euros ($9.66 billion) including its corporate banking arm Interbanca.
Interbanca, which is not being sold to Monte Paschi, was valued at about 800 million-1.1 billion euros. Santander said it would sell that unit as well for the right price.
Monte Paschi, which expressed interest in Antonveneta earlier this year, had been hunting for a partner to avoid being relegated to a regional player after the emergence of domestic behemoths UniCredit and Intesa Sanpaolo.
"Santander are amazing. They've managed to get huge capital gains in a deal they still haven't closed in very little time," said Javier Galan, fund manager at brokerage Renta 4.
"It's just a spectacular deal."
Santander said it would now cancel a capital increase of up to 4 billion euros it was planning as part of its funding of its 19.8 billion-euro bill in the ABN bid.
Monte Paschi said it expected at least 360 million euros in cost and revenues synergies from Antonveneta.
"They're offering 9 billion (euros) and can get better synergies out of Antonveneta than Santander could as a new entrant into the market," a source close to the deal said.
Bank branches in Italy have been sold at between 9 and 10 million euros a branch in recent deals, in line with the price Monte Paschi paid for Antonveneta's around 1,000 bank branches.
Santander shares jumped on the news and closed up 3.9 percent at 15 euros. Monte Paschi shares were suspended.
Antonveneta gives Monte Paschi a much-needed chance to grow in the rapidly consolidating Italian market and gives the Siena-based bank a new foothold in the rich north-east where Antonveneta is strongest.
The deal nudges Monte Paschi a bit closer to UniCredit and Intesa Sanpaolo -- both of which are worth over 60 billion euros -- in a sector where a wave of acquisitions has ensured that size matters.
The Tuscan bank, controlled by a local foundation and until recently reluctant to join the consolidation frenzy, will have roughly 3,000 branches after the deal.
Though Monte Paschi had appointed a merger adviser in March to look into its options to grow, the deal was the brainchild of its top executives, sources close to Monte Paschi said.
The buy will boost Monte Paschi's profit from 2009. It will be financed in half by equity and partly by the sale of non-core assets, Monte Paschi said.
Antonveneta was the target of a fierce takeover battle before ABN AMRO acquired it in 2006 for 7.5 billion euros.
Santander said it has no further acquisition plans at the moment and that its return on investment from the ABN deal would jump to 19 percent by 2010 from 13 percent previously.
But the ABN deal will now add 4 percent to its earnings per share by 2010 instead of 5 percent previously forecast.
Previously, analysts had said that Santander's big win in the ABN deal was its Brazilian unit Banco Real, which together with Santander's current operations there will make it the country's third largest bank.
However, they had also seen good growth potential in Italy, where Santander has long been present with stakes in banks and insurers and where it has been building up a presence in consumer finance and private banking.
(Additional reporting by Juan Navarro and Jesus Aguado in Madrid and Stefano Bernabei in Rome)
Editing by David Cowell/Elizabeth Fullerton