Reuters: Private Equity: UPDATE 1-Monte Paschi shareholder denies stake sale stalling

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UPDATE 1-Monte Paschi shareholder denies stake sale stalling Mar 23rd 2012, 17:08 MILAN, March 23 | Fri Mar 23, 2012 1:08pm EDT MILAN, March 23 (Reuters) - A Luxembourg-based investment fund on Friday will bid for a 5 percent stake in Banca Monte dei Paschi di Siena, the latest suitor to emerge after two Italian private equity funds pulled out of talks to buy a chunk of Italy's third biggest bank. Top shareholder Fondazione Monte dei Paschi di Siena, which is selling part of its holding in the bank to repay large debts, said it was proceeding quickly with the planned sale. But sources close to the matter said private equity fund Equinox -- which had wanted to buy just under 10 percent of the bank -- had pulled out of talks because conditions laid out by the foundation were "not compatible" with its offer. Another Italian fund, Clessidra, was also "out of the fray", one of the sources said. However, a third fund, Luxembourg-based investment fund Optimum Asset Management, was due to present its offer later on Friday for a 5 percent stake, one of the sources said. The Siena-based foundation controlling the bank is aiming to sell a combined stake of around 10 percent spread among a group of investors, including local businessmen, after it sold 2.5 percent through off-the-market block trades. But with names of potential buyers coming and going on an almost daily basis, uncertainty over the sale is weighing on the bank's shares and piling pressure on the foundation, which must raise enough money to pay back a significant portion of its 1.1 billion euros of debts by the end of April. "The negotiations with the funds appear to get more complicated by the day," said a Milan-based trader. "This whole saga about the foundation's stake sale resembles a soap-opera, and this is increasing speculation on the shares." Shares in Monte dei Paschi ended 1.9 percent down at 0.3539 euros. This was far below the 0.40 euro level they reached earlier this month on expectations that a deal on the stake sale would be reached soon. At current prices, a 10 stake in the bank would be worth approximately 500 million euros. The foundation sought to allay market concerns with a statement on Friday saying the selection of possible buyers was proceeding quickly and that there would be no delays in the sale. But time is running out. Any investor interested in presenting a list of candidates for the bank's board, which will be renewed in April, would have to have bought the shares by the end of next week. The foundation has already won more time from creditors, a group of 12 banks including JP Morgan, Credit Suisse and Mediobanca. An initial deadline for it to start repaying its debts has been extended to April 30 from mid-March. (Reporting By Massimo Gaia, Stefano Bernabei, Silvia Aloisi. Editing by Jane Merriman) Link this Share this Digg this Email Reprints

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