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. Last Updated: 07/27/2016

Italian Banking Sector Set For Action-Packed Week

ROME -- Italy's buzzing banking sector, a hive of consolidation and merger speculation, on Monday began a make-or-break week that could decide whether twin takeover bids take flight or bite the dust.

The sector was shaken out of its long slumber a month ago when Italy's biggest bank San Paolo-IMI and third-ranked UniCredito Italiano launched simultaneous bids for Banca di Roma and Banca Commerciale Italiana.

BancaRoma and BCI - widely seen as old maids left on the shelf as other Italian banks race into each other's arms - flirted with each other for over a year before abandoning marriage plans earlier last month.

Banca di Roma's board last week resoundingly rejected San Paolo-IMI's $9.7 billion share swap offer as "completely unsatisfactory," and this week shareholders of the two banks will get their say.

Before they do, however, San Paolo-IMI's executive committee will meet Tuesday to decide whether to proceed with the bid or throw in the towel and seek another partner.

Analysts believe San Paolo is unlikely to transform its offer, which it maintains is friendly, into a hostile one because of Bank of Italy opposition to unfriendly bids.

Banca di Roma shareholders gather Wednesday and those of San Paolo-IMI on Friday amid speculation the Roman bank is now mulling an alternative linkup with Monte dei Paschi di Siena.

The other big banking bid, UniCredito's $16.4 billion all-share offer for BCI, also hangs in the balance.

Milan-based BCI has yet to respond officially to UniCredito's overtures but chairman Luigi Lucchini has called a snap board meeting for Tuesday and the word is he wants to formulate a reply before BCI shareholders gather on Wednesday.

UniCredito's board is meeting April 29.