ISS urges Mediobanca shareholders to back merger with MPS

Proxy adviser ISS has recommended that Mediobanca shareholders vote for a merger with MPS, another Italian bank.

The merger is part of an integration plan developed by MPS chief executive Luigi Lovaglio.

The boards of both banks approved the plan before Intesa made an offer for MPS.

ISS says the merger has a sound strategic basis and could help the banks achieve savings and other benefits from combining.

It also says Mediobanca shareholders would join a larger company with more freely traded shares.

Intesa has argued that completing its offer first could make the merger more efficient and reduce integration risks and duplicated costs.

ISS says the proposed merger does not, by itself, prevent Intesa’s offer from going ahead.

Mediobanca shareholders still have to decide whether to approve the merger.