(In last paragraph, corrects net profit growth to 45% instead of 4.5%)

MILAN (Reuters) -Italian merchant bank Mediobanca said on Friday it would return 4.9 billion euros ($5.74 billion) to shareholders, mostly in cash, over three years to 2028 as it seeks to fend off a hostile bid from smaller rival Banca Monte dei Paschi di Siena (MPS).

Mediobanca reiterated in a statement that MPS' offer "lacks an industrial and financial rationale for Mediobanca shareholders and carries clear and significant execution risks."

After gaining regulatory approval from the European Central Bank on Wednesday, MPS is ready to launch its all-share bid for Mediobanca next month.

In an attempt to become too big for MPS to swallow, Mediobanca proposed in April to buy private bank Banca Generali. But it was forced to delay a shareholder vote on the deal to September 25 to avoid a possible defeat, as investors opposing the deal have recently increased their holdings in the merchant bank.

In its updated three-year plan to 2028, published on Friday, Mediobanca confirmed it would focus on growing its wealth management business, with its corporate and investment banking segment providing support, and consumer finance operations serving as a driver of diversification against macroeconomic risks.

"This virtuous path will be further strengthened by the offer for Banca Generali", it said.

In its previous three-year plan to 2026, Mediobanca had said it would return more than 4 billion euros to shareholders over the period and forecast a net profit above 1.4 billion euros.

Mediobanca now sees net profit growing 45% over the three financial years to 2028, reaching 1.9 billion euros, and expects revenue to rise at an annual average rate of 6% to over 4.4 billion euros.

($1 = 0.8537 euros)