Billionaires Join Forces to Push for Change at Generali

(Bloomberg) --

Two leading shareholders of Italy’s Assicurazioni Generali SpA escalated their fight with management, agreeing to cooperate in a bid to overhaul the insurer’s strategy that could include presenting their own candidates for the board of directors, people familiar with the matter said. 

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

Generali’s board is set to meet on Sept. 27 to discuss whether it will present its own list of directors to be voted on by shareholders next year. The Italian tycoons may present an alternative proposal if the board’s slate doesn’t include a major overhaul of top executives, including the removal of Chief Executive Officer Philippe Donnet, said the people said, who asked not to be identified since discussions aren’t public. 

Del Vecchio and Caltagirone are committed to consult each other at the next general shareholder meeting and cooperate on the board renewal, the statement said. Their shareholder pact will be open to all investors who support their vision for a new course at Generali, the people said. 

Some of the Generali’s Italian investors -- including Caltagirone -- have already been pushing for changes in the insurer’s governance, according to local media reports. 

Caltagirone and Del Vecchio have also recently boosted their stakes in Mediobanca SpA, Italy’s largest investment bank and Generali’s largest single investor with a about a 13% stake, according to Bloomberg data. 

Expansion Goals

Spokesmen for Del Vecchio’s holding company Delfin, Caltagirone and Generali declined to comment. A spokeswoman for Mediobanca also declined to comment. 

Caltagirone, who serves as Generali’s vice chairman, didn’t vote to approve the company’s 2020 results, a symbolic move that underscored his disagreements with some of the insurer’s executives and their backers.

Last year, Del Vecchio, 86, 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. 

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

The EssilorLuxottica chairman has a net worth of $31.6 billion, according to the Bloomberg Billionaires index. He’s seeking to diversify his fortune into finance, which typically delivers higher returns than the eye-wear industry.

“My personal situation is part of this, and it’s a bit early to talk about that,” Donnet, CEO since 2016, said in a Bloomberg TV interview last month. 

Donnet, backed by Generali’s top investor 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.

The executive has also expanded business through acquisitions in Italy and abroad and cemented Generali’s already commanding presence in its home market. He will present the company’s new plan at an investor day scheduled for Dec. 15.

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