Mediobanca’s top investor Del Vecchio seeks more clout

imageStock Markets19 minutes ago (Sep 29, 2021 04:47AM ET)

(C) Reuters. FILE PHOTO: Italy’s Mediobanca headquarters is seen in Milan, Italy, November 8, 2019. REUTERS/Flavio Lo Scalzo/File Photo

By Elisa Anzolin and Valentina Za

MILAN (Reuters) – Mediobanca (OTC:MDIBY)’s top investor Leonardo Del Vecchio has proposed changing the Italian merchant bank’s by-laws to give more power to its board and shareholders over executives, but said he was not pushing for management or board changes.

Two years ago, Italian eyewear billionaire Del Vecchio rocked Italy’s financial establishment by emerging as the biggest investor in Mediobanca, the Milanese bank that used to pull the strings of Italy Inc.

Del Vecchio, 86, one of Italy’s richest men, has been steadily increasing his Mediobanca holding after gaining a green light from the European Central Bank. He now owns 18.9%, a stake currently worth 1.7 billion euros ($2 billion), through his holding company Delfin.

Delfin said it had no plans to push to replace Mediobanca’s current board or management.

The proposed governance changes aim to ensure Mediobanca’s managers and directors pursue “the creation of value for all shareholders … and ultimately leave the right to directors and shareholders … to decide who should run the bank.”

Mediobanca acknowledged the proposal in a note and said it would a hold board meeting in the coming days.

Delfin said it wanted Mediobanca to ditch a requirement in its by-laws stating that two or three directors – depending on the size of the board – must be executives who have held that role for at least three years.

Delfin also said it wanted the board to have more independent directors picked from at least two slates of nominees submitted by minority investors.

“We expect the market to favour the first proposal … but the second proposal could have a less market-friendly outcome,” Citi analyst Azzura Guelfi said, noting the influence of other minority investors could be limited if Delfin proposes one of the slates.

Del Vecchio has no representatives on Mediobanca’s board, which expires when the bank approves results to June 30, 2023.

After initially criticising the strategy of boss Alberto Nagel when he started buying Mediobanca shares, Del Vecchio has praised Nagel’s latest business plan presented in November 2019.

In the past, Del Vecchio and Nagel have locked horns over a project for a Milanese hospital. They also have diverging views over Generali (MI:GASI), Italy’s biggest insurer.

Mediobanca, the single largest investor in Generali, is pushing to reappoint current CEO Philippe Donnet. Generali’s board endorsed that move on Monday.

Del Vecchio, the third-largest shareholder in Generali, is part of an investor pact pushing for a change of CEO and strategy.

Earlier on Tuesday, Italy’s Benetton family, like Del Vecchio an investor in both Mediobanca and Generali, said it wanted to keep a neutral stance in relation to all of its investments.

By 0753 GMT shares in Mediobanca were up 1.3%, outperforming Milan’s blue-chip index.

($1 = 0.8537 euros)

Mediobanca’s top investor Del Vecchio seeks more clout

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