Monte Paschi ‘Unthinkable’ Move on Larger Rival Stuns Italy (2)

The last time Banca Monte dei Paschi di Siena SpA bought another lender, it was the beginning of the road to collapse and nationalization.

So when Paschi announced an unsolicited €13.4 billion ($14.1 billion) offer for larger rival Mediobanca SpA on Friday morning, Italy’s financial sector was in shock. The government had as recently as November been knocking on doors for a buyer for Paschi.

“A few months ago this would have been an unthinkable move,” said Stefano Girola, chief investment officer of the Brescia, Italy-based family office FI-MEP. The bank that “no one wanted has put itself ...