Italy Billionaires May Seek New Generali CEO as Battle Heats Up

(Bloomberg) -- Two of the leading investors at Italy’s Assicurazioni Generali SpA are escalating their battle with the insurer’s management in a push that could include replacing Chief Executive Officer Philippe Donnet, people familiar with the matter said. 

Construction magnate Francesco Gaetano Caltagirone and Luxottica founder Leonardo Del Vecchio, who together own about 11% of Generali, reached an agreement to work toward “a more profitable and effective management” of the insurer, according to a statement on Saturday. 

Generali’s board meets Sept. 27 to discuss presenting a list of directors to be voted on by shareholders next year. But if the board’s slate doesn’t represent a major management overhaul, the two Italian tycoons may present an alternative list without Donnet as CEO, said the people, who asked not to be identified as the discussions aren’t public. 

Under their agreement, Del Vecchio and Caltagirone will consult each other at the next general shareholders meeting and cooperate on board renewal, the statement said. Their pact will be open to all investors who support their vision for Generali, the people familiar said. 

Spokesmen for Del Vecchio’s Delfin Sarl holding company, for Caltagirone and for Generali declined to comment. A spokeswoman for Mediobanca SpA, the insurer’s biggest shareholder with about 13%, also declined to comment. 

Mediobanca Ties

Some of Generali’s Italian investors -- including Caltagirone -- have already been pushing for changes in the insurer’s governance, and have criticized Mediobanca’s influence over the company. 

The battle over Generali has also had a ripple effect at Mediobanca, whose CEO Alberto Nagel backs Donnet. Caltagirone and Del Vecchio have upped the ante by boosting their holdings in Mediobanca, Italy’s biggest listed investment bank. 

“Investors were expecting a declaration of war after the skirmishing over the last year between Generali, Mediobanca and the two tycoons,” said Vincenzo Longo, a market strategist at IG. “I don’t think this move affects Generali’s strategy in the short term, but it could give shares speculative appeal.”

Generali rose 1% to 17.59 euros at 9:38 a.m. in Milan, giving the insurer a market value of 27.8 billion euros ($33 billion).

Expansion Goals

Caltagirone, who also serves as Generali’s vice chairman, declined to vote to approve the company’s 2020 results, a symbolic move underscoring his disagreements with some of the insurer’s executives and their backers.

The 86-year-old Del Vecchio last year won European Central Bank approval to double his stake in Mediobanca to as much as 20%. He’s criticized Mediobanca’s management for being too passive in seeking growth opportunities and for being overly dependent on Generali’s profit. 

Del Vecchio sees the possibility to expand Generali into a top European player with strong Italian roots, people familiar with matter told Bloomberg last year. 

The EssilorLuxottica chairman has a net worth of $31.6 billion, according to the Bloomberg Billionaires Index, and he’s seeking to diversify into finance, which typically delivers higher returns than the eyewear industry.

Donnet, backed by Mediobanca, took the job five years ago, replacing Mario Greco. As CEO, the French native has cut costs, focused on digitalization and expanded into more lucrative product areas.

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