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, as it was informed by communication sources.
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.
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.
Italy's Treasury and Orrick were not immediately available for comment, while Bank of America declined to comment.
Dogged by legal claims and poor quality assets, MPS is a tough sell in Italy's banking market, which has a surplus of branches and has seen a rise in loan losses and remote banking in the COVID-19 pandemic.
UniCredit is seen as the preferred buyer for the 548-year old bank given its robust balance sheet, sources have said, despite boss Jean Pierre Mustier ruling out mergers which, he has said, only add "branches and staff."
Italy's third-largest bank, Banco BPM, is in the process of exploring possible tie-ups and may also emerge as a viable bidder for MPS.
Any deal for the Tuscan bank would only come after the Treasury acts to remove legal claims amounting to 10 billion euros, while also injecting fresh capital.
