Italy picks Bank of America, Orrick to advise on MPS privatisation

ROME/LONDON/MILAN (Reuters): Italy’s Treasury has picked Bank of America and Orrick as financial and legal advisers to secure a merger deal for bailed-out bank Monte dei Paschi (MPS) as part of its privatisation plan, four sources close to the matter told Reuters.

Rome aims to clinch a merger with a healthier peer in 2021, the sources said, to provide a long-term solution for the bank, which has been backed by the government since 2017 following an 8 billion euro ($9.5 billion) rescue deal.

The Treasury’s efforts, however, face resistance from the co-ruling 5-Star party, as well as unions and local politicians in Tuscany, who have been asking for the sale to be delayed.

The mandates, which will last 12 months, will see Bank of America’s co-head of the financial institution group, Giorgio Cocini, and Orrick’s partners, Patrizio Messina and Marco Nicolini, working closely with the Treasury to attract buyers and address the bank’s capital shortfalls.

Italy’s Treasury and Bank of America declined to comment, while Orrick was not immediately available.

Rome is expected to pay about 150,000 euros in financial and legal fees, with the lion’s share going to Bank of America, the sources said.