By Elvira Pollina and Andrea Mandala
MILAN (Reuters) -Shareholders of Italian merchant bank Mediobanca on Thursday rejected the proposal of its chief executive Alberto Nagel to buy Banca Generali, a takeover that would have created Italy’s second-largest wealth manager.
The result deals a heavy blow to Nagel’s strategy to block a bid by state-backed Monte dei Paschi di Siena (MPS) to take over Mediobanca in one of a series of transactions reshaping the Italian banking landscape.
Opposition to the Nagel plan was led by the two main investors in Mediobanca, Italy’s billionaire del Vecchio and Caltagirone families, who together hold nearly 30% of its capital.
To fend off the MPS bid, Nagel in April proposed a 6.8 billion euro ($7.9 billion) deal to buy Banca Generali, which is owned by Generali, Italy’s biggest insurer, whose key investors are Mediobanca, the Del Vecchios and the Caltagirones.
Mediobanca declared the Banca Generali bid lapsed.
“This is clearly an opportunity, for now, missed for the development of our bank and the Italian financial system,” Nagel said in a statement.
He noted that it was down in part to “shareholders who also expressed a clear conflict of interest in their engagement activities, putting (their interests) relating to other Italian situations/assets before those of Mediobanca shareholders.”
Under Italian takeover rules, Mediobanca needed shareholder approval for the Banca Generali deal due to the MPS bid, which would have become more costly if Mediobanca had bought Banca Generali.
The rejection of the Banca Generali deal removes a potential hurdle for Monte dei Paschi to snap up Mediobanca.
Mediobanca had postponed the shareholder vote on the Banca Generali bid at the last minute in June as the proposal lacked sufficient support.
In the vote on Thursday, 35% of shareholders backed the deal, 42% voted against or abstained, meaning it failed to reach the required threshold of 50% of the bank’s capital present at the meeting.
(Reporting by Andrea MandalaEditing by Keith Weir and Gavin Jones)
