Billionaire fashion magnate backs Generali’s rival management plan

Front lines are forming up in the battle for Italy’s top insurer  Generali as a key shareholder confirmed his backing for a rival management line-up and more aggressive corporate strategy.

Leonardo Del Vecchio, reported to be the insurer's #3 shareholder, told Bloomberg in an interview that he stands shoulder to shoulder with #2 shareholder Francesco Caltagirone in a bid to wrest the group from the grip of Mediobanca.

A plan concocted by Caltagirone to double the earnings growth rate at the insurer looks “highly competent and well balanced,” Del Vecchio was quoted as saying.

Rebel shareholders are set to face off against Mediobanca at an April 29 annual shareholder meeting. After a fractured 2021 shareholder meeting, Caltagirone brought in del Vecchio and others to build votes for the pending rematch.

Caltagirone has assembled a list of independent candidates who would join him on a revamped supervisory board and has identified Generali’s top officer for Austria and CEE, Luciano Cirina, as his pick to replace CEO Philippe Donnet. Cirina was promptly suspended from his post, then fired, on the news. Caltagirone stormed out of his own board post back in January.

The group has worked to drum up support with an alternative corporate strategy, offering to double the earnings growth promised by current management. The group would turn to aggressive M&A and notable cost-cutting, all while maintaining the current plan for shareholder remuneration.

Del Vecchio may hold around 8% of Generali and is considering increasing the stake, Bloomberg reported, citing "a person close to the matter." Caltagirone was last reported to hold 9.5% in Generali.

Del Vecchio's investment unit Delfin officially broke off its shareholder pact with fellow shareholder Fondazione CRT effective March 27, newswires have reported. Caltagirone had pulled out of that shareholder pact back in January, reportedly to avoid the risk that shareholder voting caps could have been put in place.

Equity brokerages have largely suggested the rival bid will fail as financial investors play it safe with a known team that has delivered a turn-around in earnings and a return to shareholder remuneration. Shareholders might, however, leverage the plan and the conflict to force current management to over-deliver on current guidance, analysts have claimed.

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