Italian prosecutors are conducting an investigation into alleged market manipulation and obstruction of supervisory functions related to the MPS Mediobanca takeover, with the chief executive of Banca Monte dei Paschi di Siena (MPS), Luigi Lovaglio, and top shareholders Delfin and Francesco Gaetano Caltagirone under scrutiny.

MPS confirmed that it had received a search warrant and that its chief executive, Luigi Lovaglio, had been served a notice of investigation by Milan’s prosecutor’s office in his capacity as chief executive officer.

The investigation concerns the €13.5bn takeover of Mediobanca. The takeover was launched in January and completed in September.

Financial Times, citing three people familiar with the matter, reported that Milanese prosecutors are investigating MPS, Delfin, and Caltagirone for alleged market manipulation and obstruction of regulatory functions.

Both Delfin and Caltagirone were also top shareholders in Mediobanca.

The news of the investigation was first reported by Italian newspaper Corriere della Sera.

Delfin indicated that its members were not involved in the alleged events and maintained that they have consistently acted in accordance with market rules and relevant regulations.

Caltagirone, meanwhile, did not provide an immediate response to a request for comment, reported the publication.

MPS expressed confidence in its ability to supply all the information needed to demonstrate the appropriateness of its actions and indicated that it fully trusted the relevant authorities, with whom it affirmed its complete cooperation.

According to individuals familiar with the matter, it is understood that prosecutors suspect the takeover may have been arranged in advance between MPS and the billionaire shareholders of both banks.

These investors have also been the subject of an ongoing investigation for several months.

The takeover, in which Italy was the single largest shareholder, surprised markets earlier this year, particularly as it followed Delfin and Caltagirone acquiring stakes in MPS two months after their longstanding investments in Mediobanca and insurer Generali.

Mediobanca is the largest investor in Generali, holding a 13% stake.

Mediobanca’s former chief executive, Alberto Nagel, had resisted the takeover bid for months.

In March, the Milanese lender filed a complaint with the European Central Bank (ECB), alleging concealed concerted action between Delfin and Caltagirone.  

Despite this, the ECB approved the deal.

MPS increased its offer with a €750m cash sweetener.

The shareholder acceptance rate exceeded initial expectations, resulting in Nagel’s resignation.

Prosecutors now claim that Delfin, Caltagirone, and MPS coordinated their actions—including their initial investment in MPS last year—and failed to disclose this coordination to regulators.