Mediobanca Boosts Stake in Generali as Battle Over Leadership Heats Up

September 24, 2021 by and

Italy’s Mediobanca SpA strengthened its grip over insurer Assicurazioni Generali SpA, boosting its stake to more than 17% just days before a board meeting that could decide the future of embattled Chief Executive Officer Philippe Donnet.

The investment bank, already Generali’s largest single shareholder, raised its holding from about 13% via a stock-lending mechanism, according to a statement late Thursday.

Italian Tycoons Seek Allies in Battle Over Choice of Generali’s Next CEOGenerali Says Directors Support Keeping Donnet as CEO

Mediobanca is looking to shore up its position amid an intensifying battle with two Italian billionaires who hold significant stakes in the insurer.

Construction magnate Francesco Gaetano Caltagirone and Leonardo Del Vecchio, the founder of eyewear giant Luxottica, have long complained about both the investment bank’s influence over Generali and its management.

The two have contended that Generali, Italy’s biggest insurer, has lost its way under Mediobanca’s watch, lagging behind its European main peers over the last 15 years, people close to the tycoons said.

Mediobanca shares advanced as much as 2.9% in Milan trading, before trimming gains to 0.5% as of 9:48 a.m. Generali shares were up 0.7%.

“The clash between Mediobanca and a few other core shareholders of Generali is now self-evident,” Fabrizio Bernardi, an analyst at Bestinver, wrote in a note. Banca Akros said in a note that Mediobanca’s “move increases the likelihood of the reappointment of Mr. Donnet.”

Billionaires’ Pact

The two billionaires earlier this month announced a pact that gives them joint control of about 11% of Generali. In addition to agitating for a management change, the duo is also trying to loosen the influence of Mediobanca.

They’ve also gained the support of banking foundation Fondazione Cassa di Risparmio di Torino, which joined their pact and currently holds a 1.3% stake.

But a majority of Generali’s board members last week backed Donnet’s candidacy for a third term. The insurer’s board meets Monday to discuss a list of directors to put to a shareholders vote next year.

The two Italian tycoons may present an alternative list that excludes Donnet, people familiar with their plans said earlier this month.

Complicating Mediobanca’s position: the fact that Del Vecchio holds a stake of as much as 20% in the lender. He’s criticized Mediobanca’s management for being too passive in seeking growth opportunities and for being overly dependent on Generali’s profit.