Milan, Italy: Italy's Monte dei Paschi di Siena (MPS) bank has acquired a controlling stake in rival Mediobanca after launching a hostile public takeover offer, Italian news agencies Ansa and Radiocor reported.

MPS, the world's oldest bank, has acquired a 62.3 percent of the share capital of its larger rival in the first round of the share offer, according to stock exchange data, as it seeks to create the country's third largest banking group.

MPS surpassed last week the minimum threshold of a 35 percent stake it had set to follow through on the offer, which Mediobanca's board of directors has rejected.

Last week Mediobanca said the offer "lacks industrial rationale" and the valuation is "entirely inadequate".

MPS was bailed out by the Italian government in 2017 and has long been considered the weak link in the Italian banking sector, although it has begun a clear recovery.

Its January bid for Mediobanca, which valued the rival bank at 13.4 billion euros, stunned the markets.

MPS's own market capitalisation -- 9.7 billion euros as of September 2 -- was well below that of its target, at 16.5 billion euros.

But MPS's offensive has the backing of Italian Prime Minister Giorgia Meloni's government, which is eyeing a third banking group to compete with Intesa Sanpaolo and UniCredit.

The Italian state still has a stake of 11.7 percent in MPS.

MPS sweetened its offer for Mediobanca shareholders last week, adding 90 euro cents per share to 20.776 euros per share, taking it close to the market price.

The first round of the share offer closed on Monday, and MPS should announce the official results by September 12. A second round will take place from September 16 to 22.

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