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Insurer Generali has agreed to progress with talks to sell Banca Generali to its largest shareholder, Mediobanca, setting up a showdown vote this month that will determine Mediobanca’s future.
On Wednesday, the insurer said that it had told Mediobanca it would proceed with negotiations about the sale of its private banking arm. Mediobanca is seeking to buy the unit in a €6.3bn deal; part of an effort to fend off a hostile takeover bid by smaller rival Monte dei Paschi di Siena.
Mediobanca had asked Generali to agree crucial terms of the deal before the Milanese bank called a shareholder meeting to greenlight the bid.
Under Italian law the subject of a takeover offer cannot launch other bids without putting a deal to a shareholder vote. Mediobanca, which is proposing to fund the Banca Generali purchase by selling its 13 per cent stake in Generali, will need the support of a majority of investors.
The Milanese lender first called such a vote in June. But it subsequently postponed the meeting to September after key shareholders said they needed more time to assess the Banca Generali deal.
Mediobanca faces opposition from its largest shareholders: Delfin, the holding company for Italy’s billionaire Del Vecchio family, and Roman building tycoon Francesco Gaetano Caltagirone. They are also top shareholders in Generali and in Monte dei Paschi di Siena.
Delfin and Caltagirone have long been at odds with the management of both Mediobanca and Generali but have failed to unseat both Mediobanca’s chief executive Alberto Nagel and Generali’s Philippe Donnet.
Mediobanca is now expected to hold the crunch shareholder meeting on August 21, ahead of the deadline for Monte dei Paschi’s takeover bid on September 8.
If Mediobanca’s investors approve the deal, Generali’s committee on so-called “related parties transactions” will then have to publish a decision on the deal — a decision will be binding for the insurer’s board.
Nagel views the Banca Generali deal as a make or break opportunity to fend off MPS’s hostile takeover. MPS’s offer is already priced at a discount to Mediobanca’s current €16.5bn market capitalisation, and agreeing the €6.3bn acquisition of Banca Generali would increase the Milanese group’s valuation further.
MPS’s capital reserves, which it could use to improve its offer, rose over the quarter ending in June, the bank said on Wednesday. Its revenues were also up by 4 per cent at more than €1bn over the period.
MPS chief executive Luigi Lovaglio, who is credited with restructuring the once ailing Tuscan lender, said on an earnings call he was fully focused on the Mediobanca deal. But he added that the lender’s defensive posture showed an “increasingly erratic strategic approach . . . without a clear rationale”.
