Monte dei Paschi stake set to be sold The banking foundation behind Banca Monte dei Paschi di Siena is considering a "mixed" sale of a 15 per cent stake in Italy's third-largest bank by assets in a move analysts say could lead to it becoming a takeover target. Managers of the foundation, which owns 49 per cent of the Siena bank that is reputed to be the world's oldest, are struggling to resolve a credit crisis after they ran up debts of €1.1bn in the teeth of the sovereign debt turmoil last year. In an effort to raise funds to pay off its creditors, the foundation has agreed to cut its holding for the first time in its 500-year history. The stake is likely to be split between domestic private investors and a portion sold via an accelerated book build. Analysts have long considered Banca Monte dei Paschi a potential takeover target for a larger French or Spanish group keen to exploit its rich retail customer base in Italy's Tuscany and Veneto regions. The foundation's debts, which are held in several tranches by 13 banks, led by Credit Suisse, Mediobanca and JPMorgan, and backed by its shares in the Tuscan bank, need refinancing in stages in the coming weeks. The foundation also breached loan covenants on a portion of the debt earlier this year after a slide in the bank's share price meant the debt accounted for significantly more than 20 per cent of its net asset value. According to people familiar with the talks, the foundation wants to sell the majority of a 15 per cent stake in the bank to so-called "friends and family," such as Italian entrepreneurs and local private equity groups who are considered non-hostile investors. However, amid signs of insufficient local demand for the entire stake, the foundation and its creditors, who hold the shares as collateral, are also considering selling any remainder on the open market, say people close to the negotiations. A holding of as much as 7 per cent - worth about €400m at Friday's closing price - could be sold this week, those people said. The Italian Treasury, which regulates banking foundations, has given approval for the sale. The turmoil in Siena over the foundation's ownership of the bank is set to trigger a wider shake up of governance. Shareholders in Banca Monte dei Paschi are due to name a new board at the end of April, and the new investors are expected to be in place by that time in order to influence the new board make up. Bankers say whoever wins the coveted role of chairman will provide a strong indication of future strategy. Alessandro Profumo, former chief executive of UniCredit, Italy's largest bank by assets, is the frontrunner for the job and is seen as a symbolic of shift in outlook at the bank. However, some local shareholders are pushing for an internal appointment in an attempt to maintain the status quo.