* CEO says partners Axa, Anima welcome as investors
* Says commercial accords have their own rationale
* Focused on raising full amount in one go
SIENA, Italy, Sept 15 (Reuters) - Shareholders in Monte dei
Paschi di Siena (MPS) on Thursday approved a new share
sale for up to 2.5 billion euros ($2.5 billion), while doubts
linger on whether the state-owned bank can pull off its latest
Five years after a bailout that handed the state a 64%
stake, MPS needs money to cut costs by shedding thousands of
staff through costly early retirements and to replenish its
Chief Executive Luigi Lovaglio said MPS would launch its
seventh share issue in 14 years in October, while a new
government is formed after national elections on Sept. 25.
"This is the official start of the match. Now we race," he
Stagflation fears roiling financial markets complicate
Lovaglio's task, with MPS unable to offer a sufficient discount
on its new shares after its market value fell by 60% this year.
Italy will cover 64% of the share issue, but private
investors must provide the rest to avoid breaching European
rules on state aid.
"We're focused on bringing home 2.5 billion euros in one go
within the expected timeline," Lovaglio said when asked if MPS
could fall short of its maximum target.
MPS needs the money in November to take advantage of laws on
early retirement that expire at the end of the month.
Lovaglio, a respected former UniCredit executive whom the
Treasury recruited after failing to sell MPS to UniCredit, has
secured a pre-underwriting accord with a group of eight banks
led by Bank of America, Citi, Credit Suisse and Mediobanca.
The underwriters have the right to walk away if feedback
from investors is negative. A person close to the consortium
said the banks would assess the market situation after investor
meetings Lovaglio will hold in London next week.
MPS's commercial partners, asset manager Anima Holding
and insurer Axa, are open to providing
capital to the Tuscan bank in exchange for a strengthening of
their commercial agreements, people familiar with the matter
Lovaglio has refrained so far from holding discussions with
either because stronger commercial ties would make it harder for
MPS to seek a merger partner in the future to allow Rome to cut
He said Axa and Anima were welcome to invest in the cash
call on the same terms as other investors.
"A potential revision of our commercial partnerships cannot
but follow the usual rationale for this type of accord, and in
the best interests of the bank," Lovaglio added.
Anima could be willing to contribute up to 250 million
euros, one of the people said. News of Anima's support has
lifted MPS shares this week and its subordinated bonds, which
had been hit by fears of conversion into equity.
($1 = 1.0026 euros)
(Reporting by Silvia Ognibene in Siena and Valentina Za in
Editing by Keith Weir and Leslie Adler)