MILAN (Reuters) -Mediobanca Chief Executive Alberto Nagel faces a close shareholder vote on Thursday on his proposed 6.8 billion euro ($7.9 billion) acquisition of Banca Generali to create Italy’s second-largest wealth manager.
Merchant bank Mediobanca made the move for Banca Generali as it seeks to thwart a takeover bid from state-backed Monte dei Paschi di Siena in a consolidation wave sweeping Italian banking.
Mediobanca postponed the shareholder vote on the Banca Generali bid at the last minute in June as the proposal lacked sufficient support. The outcome still remains uncertain, with a web of cross-shareholdings complicating the picture.
Mediobanca initially postponed the vote to September 25, before bringing it forward to August 21, saying that an earlier vote was needed for investors to pick the best option for the bank.
Cutting its MPS stake to below 12% from the 68% it acquired in a 2017 bailout, the Italian government has brought Italy’s billionaire Del Vecchio and Caltagirone families on board as leading MPS shareholders.
The Del Vecchio heirs and the Caltagirone group are also the main investors in Mediobanca, and have long been at loggerheads with its CEO Nagel.
To fend off the MPS bid, Nagel in April proposed buying Banca Generali, which is owned by Generali, Italy’s biggest insurer, whose key investors are Mediobanca, the Del Vecchios and the Caltagirones.
To pay for Banca Generali, Mediobanca would tender its 13% stake in Generali.
The vote will take place in a closed-door meeting scheduled to start at 10 a.m. (0800 GMT).
The expected turnout is around 77%-78% of the bank’s share capital, a source close to the merchant bank said on Wednesday.
For the CEO’s proposal to pass, at least 50% plus one share of the capital attendance at the meeting is needed.
The Caltagirone-Del Vecchio front, which owns almost 30% of Mediobanca, is not expected to back the deal. Other Italian investors with around 7-8% of capital are also unwilling to approve it, given Rome’s support for the MPS bid.
UniCredit, which holds 1.9% of Mediobanca, has not clarified its stance.
With leading governance advisers in favour of the deal, Nagel can count on the support of institutional investors, including funds that bought into Mediobanca recently as some historic shareholders cut their holdings.
Under Italian takeover rules, Mediobanca needs shareholder approval for the Banca Generali deal due to the MPS bid, which would become more costly if Mediobanca buys Banca Generali.
($1 = 0.8593 euros)
(Reporting by Andrea MandalàEditing by Keith Weir and Giselda Vagnoni)
