By Valentina Za and Gianluca Semeraro
MILAN (Reuters) -Italy’s Mediobanca struck back on Monday in its fight for independence with a 6.3 billion euro ($7.15 billion) offer for wealth manager Banca Generali to be financed through its stake in insurer Generali.
The stake that makes Mediobanca the biggest investor in Generali has long pitted the Milanese bank against two other major shareholders: construction magnate Francesco Gaetano Caltagirone and Delfin, the investment vehicle of Italy’s Del Vecchio family.
They own 17% of Generali, and around 27% of Mediobanca.
In the latest twist of the years-long feud, Caltagirone and Delfin have acquired almost 20% of state-backed Monte dei Paschi di Siena and are supporting its hostile bid for Mediobanca.
MPS’ takeover attempt is one of many hostile offers rocking Italian banks, which enjoyed record profits thanks to higher interest rates after a deep clean-up, and are now bracing for declining revenues.
Normally rare in banking, hostile moves have become the norm in Italy.
Mediobanca CEO Alberto Nagel had long held ambitions over Banca Generali to strengthen the wealth management business.
At least one previous attempt had not been successful and contributed to worsening tensions with Caltagirone and Delfin.
“You know we have been chasing this opportunity for many years,” Nagel told analysts. “We have found that at this moment a lot of stars aligned.”
Mediobanca last week scored a major victory against Caltagirone and Delfin when it managed to appoint 10 directors on the 13-strong Generali board, including CEO Philippe Donnet.
Caltagirone only secured three seats despite receiving at the last minute support from UniCredit, which recently bought 6.7% of Generali.
UniCredit’s strategy over Generali remains unclear, but bankers say CEO Andrea Orcel could be interested in wealth management deals with the insurer.
INDUSTRIAL PARTNERSHIP
Mediobanca, which will double its wealth management revenue with the deal to 45% of the total, said it intended to keep Banca Generali’s partnerships with Generali in insurance and asset management, expanding them to the new combined entity.
“Through this large-scale reallocation of capital to wealth management, the combination will transform the relationship between Mediobanca and Generali from a financial investment to a strong industrial partnership,” it said.
Due to the MPS bid and Italian takeover rules, Mediobanca shareholders on June 16 will need to approve the Banca Generali acquisition, with a simple majority.
Mediobanca’s 13% stake in Generali is worth around 6.5 billion euros at current market prices.
Shares in Generali fell 1.8% by 0806 GMT with traders saying the deal would see the insurer let go of a profitable business in return for its own shares.
Generali owns 50.2% of Banca Generali.
The two Mediobanca directors appointed by Delfin failed to back the Banca Generali bid, Mediobanca said.
Delfin and Caltagirone have accused Nagel of relying excessively on income from the Generali stake and exercising excessive influence over the insurer.
The exchange offer, which Mediobanca said it expects to complete by end-October, translates to a deal price of 54.17 euros per share, an 11% premium to Banca Generali’s last close.
Shares in Banca Generali rose 8% while Mediobanca was flat.
($1 = 0.8796 euros)
(Additional reporting by Abinaya Vijayaraghavan in Bengaluru and Giancarlo Navach in Milan; Editing by Muralikumar Anantharaman and David Evans)
