The world's oldest bank is being privatized

Italy has made progress in its plans to re-privatize the world's oldest bank, two years after an initial failed attempt, by selling a 25 percent stake in the bailed-out Monte dei Paschi di Siena, generating 920 million euros ($1 billion) in revenue.

The sale has bought Italy time in its search for a more permanent solution for its fifth-largest listed bank.

Due to strong demand, Italy increased the size of the offering, which was initially set at 20 percent. Because of the demand, the discount on the sale remained at 4.9 percent compared to the closing price of Monte Paschi shares on Monday, which was 3.07 euros. Italy had anticipated a discount rate of 6 percent.

With rising interest rates pushing the profits of Italian banks to record levels, the bank's net income is estimated to exceed 1.1 billion euros this year.

BofA Securities, Jefferies, and UBS Europe acted as intermediaries for the bank's sale, which was carried out through an accelerated book-building process.

As part of the transaction, Rome has committed not to sell any more shares on the market for 90 days without the approval of the global coordinators.

The commitments Italy agreed upon with European Union competition authorities during its bailout package require Rome to sell its entire 64 percent stake in the bank. Once Monday's transaction is completed, Italy's stake in the bank will fall to 39 percent.

News Source: 12punto