(Reuters) – A boardroom battle at Generali has escalated following the No. 2 investor in Italy’s biggest insurer resigned in the board in a challenge to the reappointment of CEO Philippe Donnet.
Mr. Donnet’s bid for a new term as leader is at the center of a struggle among Generali’s biggest investors, including construction and newspaper magnate Francesco Gaetano Caltagirone, who stepped down in the board on Thursday.
“It appears we may be reaching some ‘crunch point’,” Autonomous Research said.
Mr. Caltagirone has partnered with eyewear billionaire Leonardo Del Vecchio to challenge the influence of investment bank Mediobanca, Generali’s biggest investor.
Caltagirone holds 8.04% of Generali, trailing Mediobanca’s 12.8% stake. Mr. Del Vecchio may be the No. 3 investor with nearly 7%.
The two tycoons blame Mediobanca, which reaps a sizeable share of their income from Generali, for holding back the insurer’s expansion, people close to the matter have said.
Mr. Donnet, who's backed by Mediobanca along with a most of board members, in December announced Generali’s first buyback in 15 years and better dividends.
With Italy’s financial sector in consolidation mode, the shareholder tensions are fueling speculation about possible M&A moves involving both Generali and Mediobanca.
Mr. Del Vecchio, 86, became Mediobanca’s biggest shareholder in 2022. Mr. Caltagirone has also recently built a stake within the Milanese investment bank that accustomed to pull the strings of Italy’s biggest companies thanks to its extensive shareholdings.
Growing hostility
Mr. Caltagirone and Mr. Del Vecchio are set to present their own CEO candidate the following month, along with an alternative technique for the insurer, an individual close to the matter told Reuters on Friday.
Mr. Caltagirone’s offensive began in April when he snubbed a general meeting to approve Generali’s results.
In a sign of growing hostility, he voted against Mr. Donnet’s new strategy in December and it has not attended board meetings lately, another person with knowledge of the problem said.
He tendered his resignation inside a three-page letter addressed to the Generali chairman, the origin said.
Generali said on Thursday that Mr. Caltagirone had complained he had been prevented from giving his “critical contribution” to matters like the group’s start up business plan or board nominees.
The company’s current board could begin the choice process for its renewal as early as in a few days.
Mr. Caltagirone and Mr. Del Vecchio in September struck a pact to consult over moves at Generali. After increasing their respective stakes and bringing smaller investor CRT aboard, they control a combined holding of a nothing more than 16%.
The pact is intact after Mr. Caltagirone’s decision, a third source close to Mr. Del Vecchio said.
To carry excess fat in a shareholder meeting in April to name the new board, Mediobanca has borrowed shares to achieve a 17% voting stake.
But about 35% of Generali’s share capital is incorporated in the hands of institutional investors and small savers hold another 23%, meaning their votes are likely to decide the outcome.
