A bidding war is underway for the world's oldest bank

Rome — A bidding war is underway for the world's oldest bank, Italy's Banca Monte dei Paschi di Siena (MPS).

Founded in 1472 by the Republic of Siena to provide credit to poorer citizens, the Tuscan lender has evolved over more than five centuries into one of Italy's largest banking institutions and a cornerstone of the country's financial system.

Two rival suitors emerged within about 24 hours. On Monday, Italy's largest bank, Intesa Sanpaolo, launched an unsolicited 31 billion euro (about $36 billion) bid for MPS. The offer came just one day after Banco BPM, Italy's third-largest bank by assets, proposed what it described as a "merger of equals."

Intesa said its proposal would create the second-largest banking group in the European Union's common currency eurozone, behind Spain's Banco Santander.

While Banco BPM did not disclose the financial terms of its offer, it said the combined group would have a market capitalization of around 50 billion euros ($58 billion), creating Italy's second-largest lender.

Banco BPM's approach has garnered both political and financial scrutiny. The bank's largest shareholder is French banking giant Crédit Agricole, which owns roughly 20% of BPM. Critics argue a merger could give Paris an indirect route into one of Italy's most strategically important financial institutions, raising concerns over the future control of MPS's vast holdings.

MPS owns 13% of Generali Insurance, one of Italy's largest private holders of government bonds - one key reason why a potential takeover or merger carries significance for Italians beyond banking.

While no senior Italian officials have voiced public resistance to control of MPS falling into French or other foreign hands, concerns about Crédit Agricole's influence over Banco BPM have repeatedly surfaced within political and financial circles.

The Financial Times reported resistance among some figures within Italy's government to a BPM-MPS merger over the prospect of increased French influence over strategic Italian financial assets, including government debt.

The issue is especially delicate for Prime Minister Giorgia Meloni's nationalist government, which has taken an increasingly interventionist approach to protecting nationally important companies from foreign influence.

According to the Reuters news agency, Meloni and key allies have previously sought to prevent foreign investors from gaining greater control over Generali, reflecting a desire to preserve domestic influence over strategic sectors of the economy.