By Elvira Pollina and Andrea Mandala
MILAN (Reuters) -Mediobanca shareholders on Thursday rejected a plan to buy Banca Generali, dealing a blow to the Italian merchant bank’s attempts to thwart a hostile takeover by Monte dei Paschi di Siena (MPS).
The bid battles are among a series of transactions which have been reshaping Italy’s banking landscape as companies look for scale.
Mediobanca had pitched the Banca Generali plan, which would have created Italy’s second-largest wealth manager, as an alternative to the MPS transaction.
The higher share price multiples at which wealth managers such as Banca Generali trade could have also lifted Mediobanca’s valuation.
Opposition to the plan was led by Mediobanca’s two main investors, Italy’s billionaire Del Vecchio and Caltagirone families, who together hold nearly 30% of its capital, and have long been at loggerheads with CEO Alberto Nagel.
The families are also leading private shareholders in MPS and back its hostile bid for Mediobanca.
A takeover of Mediobanca, a former lynchpin of Italian capitalism now active in wealth management, by more retail-focused MPS has the blessing of the government which believes it will strengthen the industry in Italy.
Nagel in April proposed a 6.8 billion euro ($7.9 billion) deal to buy Banca Generali, which is owned by Generali, Italy’s biggest insurer, whose key investors are Mediobanca, the Del Vecchios and the Caltagirones.
NAGEL RUES ‘MISSED OPPORTUNITY’
After the vote, Mediobanca declared the Banca Generali bid had lapsed. Nagel lamented the impact of the complex web of cross-ownerships on the outcome.
“This is clearly an opportunity, for now, missed for the development of our bank and the Italian financial system,” Nagel, who has led Mediobanca since 2008, said in a statement.
He added that it was down in part to “shareholders who also expressed a clear conflict of interest in their engagement activities, putting (their interests) relating to other Italian situations/assets before those of Mediobanca shareholders.”
Delfin, the holding company of the late Ray-Ban billionaire Leonardo Del Vecchio, declined to comment. However, a source close to the holding company said that “the vote was an expression of concerns about the unusual methods and timing of the transaction rather than its strategic rationale”.
A spokesperson for the Caltagirone family did not immediately respond to a request for comment.
Mediobanca owns 13% in Generali that Nagel had aimed to use to buy Banca Generali.
Under Italian takeover rules, Mediobanca needed shareholder backing for the Banca Generali deal due to the MPS bid, which would have become more costly if Mediobanca had bought Banca Generali.
In Thursday’s vote, 78% of Mediobanca’s share capital was represented.
In total, 35% of shareholders backed the deal, mostly institutional investors, while 42% voted against or abstained, including the Caltagirones and Del Vecchios, meaning the required threshold of 50% of the bank’s capital present at the meeting was not met.
Mediobanca had postponed the shareholder vote at the last minute in June as the proposal lacked sufficient support.
(Writing by Keith Weir and Andrea Mandala. Editing by Gavin Jones and Mark Potter)
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