A battle within Generali’s board has escalated after the second largest investor in Italy’s biggest insurer resigned from the board contesting the reappointment of CEO Philippe Donnet.
Donnet, who is seeking a new term as CEO, is at the center of a fight between Generali’s biggest investors, including construction and media magnate Francesco Gaetano Caltagirone, who quit the board on Thursday.
Caltagirone has teamed up with eyewear billionaire Leonardo Del Vecchio, the insurer’s third largest shareholder, to challenge the influential investment bank Mediobanca, Generali’s biggest investor.
Caltagirone owns 8.04% of Generali, behind Mediobanca’s nearly 13% stake. Del Vecchio is the 3rd investor with almost 7%.
The two tycoons blame Mediobanca, which derives a large share of its revenue from Generali, for holding back the insurer’s expansion, people familiar with the matter said.
Donnet, who is backed by Mediobanca and a majority of board members, in December announced Generali’s first takeover in 15 years and higher dividends in a bid to keep his job.
While the Italian financial sector is in consolidation mode, tensions among shareholders are fueling speculation about possible mergers and acquisitions moves involving both Generali and Mediobanca.
Del Vecchio, 86, became the main shareholder of Mediobanca in 2019. Caltagirone also recently took a stake in Mediobanca.
Caltagirone and Del Vecchio are expected to present their own CEO nominee and an alternative strategy for the insurer in February, a person familiar with the matter told Reuters on Friday.
Caltagirone launched its offensive in April by snubbing a general meeting to approve Generali’s results.
In a sign of growing hostility, he voted against Donnet’s new strategy in December and has not attended board meetings lately, a second person with knowledge of the matter said.
He forcibly joined Del Vecchio in September and their consultation pact on Generali, which also includes small investor CRT, controls a stake of more than 16% in the insurer.
The pact remains intact following Caltagirone’s resignation, added a third source close to Del Vecchio.
To gain more leverage at a general meeting of shareholders in April to appoint a new board of directors, Mediobanca borrowed shares to achieve a 17% voting stake.
But about 35% of Generali’s share capital is in the hands of institutional investors, and small savers hold another 23%, meaning their votes are likely to decide the outcome.
(Writing by Valentina Za; editing by Jane Merriman)
Generali Life Assurance (Thailand) Plc.
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