Billionaire Del Vecchio Seeks to Raise Stake in Generali’s Biggest Investor, Mediobanca

Italian eyewear billionaire Leonardo Del Vecchio stepped up his efforts to become a bigger player in Italy’s finance industry, asking for approval to raise his stake in Mediobanca SpA to as much as 20%. The shares jumped as much as 14%.

Del Vecchio, who owns 10% of Italy’s largest publicly traded investment bank, submitted the request to the Bank of Italy on May 29, he said in a statement on Monday, a day after press speculation mounted on his move.

The 85-year-old founder of Luxottica SpA is seeking to diversify his fortune into banking, which typically grants higher yields than the eyewear industry. He also wants to preserve Mediobanca’s Italian roots and is prepared to defend the bank from hostile takeover approaches, people familiar with his strategy said in February. In that month, Bloomberg reported that he was in informal talks with the European Central Bank on a preliminary request to double his stake to as much as 20%.

Del Vecchio and his investment vehicle, Delfin, became vocal critics of what they saw as an overly conservative strategy under Chief Executive Officer Alberto Nagel after buying their initial stake. The billionaire intends to support the CEO as long as he delivers the expected returns, people familiar with the matter have said.

Del Vecchio’s moves are prompting concerns over a lack of clarity about his strategic goals for the bank, CitiGroup analyst Azurra Guelfi said in a note. “Mr. Del Vecchio is a successful entrepreneur but with limited experience in the banking business,” she said.

The regulator has 60 working days to answer the request, according to the statement.

Mediobanca was up 11% at 6.48 euros as of 9:18 a.m., giving the company a market value of 5.75 billion euros ($6.4 billion). That cut’s this year’s decline to 34%.

Del Veccho’s move is also linked to the insurance business, since Mediobanca is the biggest investor in Assicurazioni Generali SpA.
Del Vecchio, now chairman of Essilor Luxottica SA, sees the opportunity to expand Generali into a top European player with strong Italian roots, the people said.

Del Vecchio joined Milan’s business establishment last year with the surprise announcement of a $1 billion investment in Mediobanca. He has said he wants to bring stability to the bank, while analysts and local media have speculated he’s really targeting governance changes.

Italian daily La Repubblica first reported Del Vecchio’s formal request on Sunday.

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