The proposed framework aims to align shareholder stakes with the current market valuations of both institutions, according to sources familiar with the discussions. By balancing equity with a cash component, the banks seek to create a viable path forward that sidesteps the terms currently proposed by Intesa Sanpaolo.

Both Monte dei Paschi and Banco BPM have opted not to comment on the internal deliberations. While the market monitors these developments closely, the specific financial details remain confidential, and the feasibility of the deal hinges on further negotiations between the banks' respective advisory teams.