Banca Monte dei Paschi di Siena SpA

Eyewear tycoon Leonardo Del Vecchio, who owns 1.9% of UniCredit, opposes the lender taking over rival Monte dei Paschi and is in touch with other large Italian investors who share concerns about a potential deal, two people close to the matter said.

Italy's government is working on a plan to take on about 14 billion euros ($17.27 billion) of UniCredit's non-performing loans to make a deal for state-owned Monte dei Paschi more attractive to the country's second-biggest bank, sources said.

Jean Pierre Mustier's decision to step down as CEO of UniCredit had nothing to do with a possible acquisition of bailed-out rival Monte dei Paschi (MPS), UniCredit Chairman-elect Pier Carlo Padoan was quoted as saying on Sunday.

The board of UniCredit would never agree to a transaction that harms the group's interests and its capital position, a spokesman for the Italian bank said on Tuesday.

UniCredit is working with strategic advisers Goldman Sachs and JPMorgan, three people close to the matter said, as it prepares to update its business plan next year and weighs a potential acquisition of state-owned peer Monte dei Paschi.

Italy's Treasury is working on a package of incentives to entice potential buyers for Monte dei Paschi, including a scheme to hive off pending legal disputes that hamper a sale of the bailed-out bank, three sources familiar with the matter said.

* Monte dei Paschi faces capital shortfall (Adds details on privatisation plans)

Italy's Treasury asked financial and legal advisers on Friday to pitch for a role in the privatization plan for Monte dei Paschi as it aims to secure a merger deal for the ailing lender, two sources familiar with the matter told Reuters.

The CEO of Monte dei Paschi told directors on Monday the bailed-out Italian bank needs 1.5-2.0 billion euros ($1.7-$2.3 billion) in cash to avoid breaching capital requirements in the first quarter of 2021, a source with knowledge of the matter said.

* Cash call among options being considered (Adds details, comments)

* Reprivatisation plans meet resistance by co-ruling 5-Star (Adds comment from source on capital strengthening)

UniCredit is demanding clients book an appointment to access its branches, a spokesman for Italy's second-biggest bank said on Thursday, as the country battles daily new records in COVID-19 infections.

* Potential buyers want Treasury to offset purchase costs, risks (Adds details, sources and background)

Italy's Monte dei Paschi has called an extraordinary board meeting on Oct. 29 to discuss hiking provisions against legal risks after a court convicted two former top executives in a false accounting case, two sources close to the matter said.

Italian Prime Minister Giuseppe Conte is expected to sign in the next few days long-awaited measures paving the way for a crucial bad loan clean-up at Monte dei Paschi (MPS) and the sale of the bank, two government sources said.

The appointment of former Economy Minister Pier Carlo Padoan as chairman designate of UniCredit would make it inappropriate for the Italian bank to buy state-owned Monte dei Paschi (MPS), lawmakers from Italy's co-ruling 5-Star Movement said.

A sale of Banca Monte dei Paschi to UniCredit would be inappropriate after UniCredit announced it would appoint former Economy Minister Pier Carlo Padoan as chairman, lawmakers from Italy's ruling 5-Star Movement said.

The management of Italy's Banca Monte dei Paschi di Siena is not involved in any talks on if and when the Treasury may sell its stake in the lender, the bank's Chief Executive Guido Bastianini said on Tuesday.

Italy is close to approving plans to sell its stake in Monte dei Paschi di Siena <BMPS.MI> and to cover most of the troubled Tuscan bank's capital needs of around 1 billion euros ($1.2 billion), a government source said.