Generali board battle intensifies with resignation of second investor

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A battle within Generali’s board escalated after the No.2 investor in Italy’s largest insurer resigned from the board to challenge the reappointment of CEO Philippe Donnet.

Donnet, who is running for a new term as CEO, is at the center of a fight between Generali’s biggest investors, including construction and press mogul Francesco Gaetano Caltagirone, who resigned from the board on Thursday.

Caltagirone has teamed up with eyewear billionaire Leonardo Del Vecchio, the insurer’s third-largest shareholder, to challenge influential investment bank Mediobanca, Generali’s largest investor.

Caltagirone owns 8.04% of Generali, behind Mediobanca’s almost 13% stake. Del Vecchio is the # 3 investor with almost 7%.

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The two tycoons accuse Mediobanca, which derives a significant portion of its revenue from Generali, of 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 buyout in 15 years and higher dividends in a bid to keep his job.

With the Italian financial sector in consolidation mode, tensions between shareholders are fueling speculation about possible mergers and acquisitions involving both Generali and Mediobanca.

Del Vecchio, 86, became Mediobanca’s largest shareholder in 2019. Caltagirone also recently acquired a stake in Mediobanca.

Caltagirone and Del Vecchio are expected to present their own CEO candidate and an alternative strategy for the insurer in February, a person familiar with the matter told Reuters on Friday.

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Caltagirone began his offensive in April when he snubbed a general assembly to endorse 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 joined Del Vecchio in September and their consulting pact on Generali, which also includes small investor CRT, controls a more than 16% stake in the insurer.

The pact remains intact after Caltagirone’s resignation, added a third source close to Del Vecchio.

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To gain more leverage at a general shareholders’ meeting in April to appoint a new board of directors, Mediobanca borrowed shares to achieve a 17% voting stake.

But around 35% of Generali’s share capital is in the hands of institutional investors, and small savers hold an additional 23%, meaning their votes are likely to decide the outcome.

(Written by Valentina Za; edited by Jane Merriman)

Subjects
Generali Life Assurance (Thailand) Plc.

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