Business
Mediobanca's takeover defence thwarted as shareholders reject Banca Generali deal
Mediobanca's takeover defence thwarted as shareholders reject Banca Generali deal
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By Elvira Pollina and Andrea Mandala Mediobanca MIL:MB shareholders rejected a plan to buy Banca Generali MIL:BGN on Thursday, dealing a blow to the Italian merchant bank's attempts to thwart a hostile takeover by state-backed Monte dei Paschi di Siena (MPS). The bid battles are among a series of deals which have been reshaping Italy's banking landscape as companies look for scale.Mediobanca had pitched the Banca Generali plan, which would have created Italy's second-largest wealth manager, as an alternative to the MPS takeover.The higher share price multiples which wealth managers such as Banca Generali attract, could have lifted Mediobanca's valuation, helping make it less palatable as prey.Opposition to the plan was led by Mediobanca's two main investors, Italy's billionaire Del Vecchio and Caltagirone families, who together hold nearly 30% of its capital, and have long been at loggerheads with CEO Alberto Nagel.The families are also leading shareholders in MPS and are backing its 17 billion euro ($19.7 billion) bid for Mediobanca which runs until September 8.The takeover of Mediobanca, a former lynchpin of Italian capitalism now active in wealth management, by MPS has the blessing of Italy's government which believes the combination will create a strong rival to market leaders Intesa Sanpaolo MIL:ISP and UniCredit MIL:UCG.MPS CEO Luigi Lovaglio said last month a deal would be a springboard to allow the Tuscan bank to take part in a second round of consolidation he sees taking place in a couple of years.UniCredit's MIL:UCG withdrawal last month from bidding for Italy's third largest lender Banco BPM MIL:BAMI opens up another possibility. A merger between MPS and Italy's third largest lender Banco BPM MIL:BAMI has long been favoured by the Italian Treasury. NAGEL RUES 'MISSED OPPORTUNITY'Seeking to ward off MPS, Nagel proposed a 6.8 billion euro ($7.9 billion) deal in April to buy Banca Generali, which is owned by Italy's biggest insurer Generali MIL:G. Generali's key investors are Mediobanca, the Del Vecchios and the Caltagirones. After Thursday's vote in which 35% of shareholders backed the deal, failing to pass the required threshold of 50%, Mediobanca declared its bid had lapsed. Nagel lamented the impact of the complex web of cross-ownerships on the outcome."This is clearly an opportunity, for now, missed for the development of our bank and the Ita...