MPS investors should reject twin bids, special dividend, proxy adviser ISS says

MILAN, Oct 14 (Reuters) - Leading governance adviser Institutional Shareholder Services (ISS) urged shareholders in Monte dei Paschi di Siena BMPS.MI to reject proposed bids to buy Banco BPM BAMI.MI and Banca Generali BGN.MI at an upcoming vote.

MPS investors meet on October 29 to vote on the plan, which is CEO Luigi Lovaglio's defence scheme against a takeover offer by Intesa Sanpaolo ISP.MI. Intesa has bid for MPS and would then sell half of its branches to resolve antitrust issues.

In a proxy report released late on Tuesday, ISS said MPS investors were "being asked to vote on a vision that contemplates doubling the bank's size through two deals in the midst of integrating the prior transformational acquisition of Mediobanca."

ISS recommended that shareholders back the merger of Mediobanca with MPS, while voting against a special dividend distribution connected to the twin bids.

ISS said the Intesa offer "was not without concerns of its own". However, "even when viewed in isolation, the facts and disclosure do not support the proposed deals."