(Update, adds details, background) ROME / MILAN, May 18 (Reuters) – Banca Monte dei Paschi di Siena share in sharp decline after a bumpy start with the market starting to deal with the ‘dilutive effect of the next capital increase by 3 billion, an increase of 300 million compared to the current market capitalization of the Sienese bank. Party weak, the title of the institute Tuscan initially experienced a flare, which resulted in positive, then back off and lose ground. At around 10.40, Mps share 10,48 EUR down about 4% with intense exchanges already more than 1% of the capital. The bank has operated the reverse stock split at a ratio of one to twenty. The increase, for which the bank has received via the ECB and expects mid-week to Consob, should start next Monday, May 25. The previous recapitalization last summer, by 5 billion euro, was made at a discount to TERP (theoretical ex-rights price) of 35.5% with a dilutive effect of over 90%. In this case, if the bank decides to set a similar discount on the current market value, the price would be just over 2.5 euro with the issuance of more than 1.1 billion shares and dilutive effect all around 80%. Among the factors that the market is pricing there is behavior that will hold the Foundation, shareholder with 2.5%. Free a lock-up provided the shareholder agreement it has with Battalion Pactual and Fintech Foundation has rated among the possibility to sell part of shares to finance the remaining increase coverage. More …
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