March 31, 2014 / 11:51 AM / 4 years ago

UPDATE 1-Monte Paschi shareholder sells big stake to LatAm investors

(Adds details, Banco Popolare capital increase)

By Silvia Aloisi

MILAN, March 31 (Reuters) - The former controlling shareholder in Monte dei Paschi di Siena has sold a 6.5 percent stake in Italy’s third-largest bank to two big Latin American funds, another sign of foreign investors’ appetite for Italian lenders.

News of the Monte Paschi foundation’s sale to Fintech Advisory and BTG Pactual Europe follows purchases of shares in several Italian lenders by BlackRock, the world’s largest asset manager, and sent the bank’s shares up more than 11 percent on Monday.

The sale came as another Italian bank, Banco Popolare , launched a 1.5 billion euros ($2 billion) cash call, with its shares rising almost 9 percent on reports of buying by foreign investors.

The Monte Paschi foundation has sold around 25 percent of the bailed-out bank in the last two weeks, helped by more positive investor sentiment towards the Italian economy and the prospect of banking takeovers.

Italy is slowly emerging from a deep a two-year recession and the new government of Prime Minister Matteo Renzi is fuelling expectations that the country may finally tackle long-awaited reforms.

“The Renzi rally continues,” analysts at Credit Suisse wrote in a report on Monday. “Italian banks look cheap,” they said, adding that “there is significant scope for consolidation ... (which) should lead to material cost synergies and higher margins.”

The foundation, a charitable organisation with strong political ties with the city of Siena, on Monday said Fintech, a U.S.-based investment fund owned by Mexican businessman David Martinez, had bought a 4.5 percent holding.

BTG Pactual Europe, an asset management unit of the Brazilian investment bank controlled by billionaire financier André Esteves, purchased 2 percent.

“With this sale the emergency phase is over for the foundation,” the head of the foundation, Antonella Mansi, told Reuters.

The foundation sold an 18 percent stake in the bank to repay creditors earlier this month.

The foundation said it had agreed a shareholder pact with the two newest buyers to stabilise the Tuscan bank’s shareholder structure.

The foundation, Fintech and BTG Pactual agreed to keep a combined 9 percent stake in the bank after a 3 billion euro capital increase due to be launched at the end of May. The foundation now owns 5.4 percent.

The cash call is intended to pay back the bulk of 4.1 billion euros in state aid Monte dei Paschi received last year after it was hit by the euro zone debt crisis and a derivatives scandal.

The foundation’s latest share sale means that U.S. money manager BlackRock is now Monte dei Paschi’s largest shareholder with a 5.75 percent stake. It is also the biggest shareholder in rival UniCredit and the second-largest in Intesa Sanpaolo.

Corriere della Sera daily quoted the cooperative bank’s chief executive as saying on Sunday that purchases by U.S. investors were the reason for a 7 percent rise in the stock price on Friday.

Il Messaggero said on Sunday international investors had offered to buy 300 million euros worth of the new shares, quoting sources in the consortium of banks guaranteeing the cash call.

($1 = 0.7271 Euros)

Reporting by Silvia Aloisi, additional reporting by Stefano Bernabei and Claudia Cristoferi; Editing by Erica Billingham

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