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Tue 4 Feb 2014 03:19 PM

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UAE's Aabar approached to invest in world's oldest bank

Investment fund reportedly mulling stake deal in Italy’s Monte dei Paschi di Siena

UAE's Aabar approached to invest in world's oldest bank

Abu Dhabi investment
fund Aabar has been approached to invest in the world’s oldest bank, Italy’s
Monte dei Paschi di Siena, an Italian newspaper claimed.

A report this week in
the Il Sole 24 Ore newspaper said the bank’s main shareholder, the Monte Paschi
Foundation, was looking to sell its 33.5 percent stake and had approached a
number of foreign investors, including Aabar and Pamplona, a London-based
private equity firm backed by Russian billionaire Mikhail Fridman's Alfa
Group.

The report said a
Mexican investor and some Italian bidders were also in the running for the stake
in the iconic lender.

Monte dei Paschi di
Siena is Italy’s third largest lender but it was founded in 1472 and is
considered the world’s oldest continuously operated bank.

Reeling from
derivatives losses and weakened by years of economic crisis, the bank needs
fresh capital to pay back part of the €4.1bn ($5.5bn) in aid it received last
year from the government under former Prime Minister Mario
Monti.

But plans for the
rights issue were disrupted in December when the the Monte Paschi Foundation
forced a share sale to be delayed until mid-May, defying Chairman Alessandro
Profumo who was pressing for the operation to be wrapped up in
January.

The unprecedented
clash between management and shareholders has left Profumo's turnaround plans
and the future of the bank in question, with the prospect of nationalisation
looming if the capital hike is not completed before the end of the
year.

Italy's government,
struggling to rein in the world's fourth-largest public debt, can ill afford to
take over a bank that is on track to post its third straight annual loss after
losing nearly €8bn over 2011 and 2012.

* With
Reuters

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