By Carolyn Cohn, Pamela Barbaglia and Valentina Za
LONDON (Reuters) -A rebel investor in Generali could mount a legal challenge if his bid to appoint new top executives at Italy’s largest insurer loses by a narrow margin in a shareholder vote this month, the candidate to the chairman role said.
In an interview with Reuters, former Goldman Sachs banker Claudio Costamagna said Generali investor Francesco Gaetano Caltagirone could challenge in court a victory by the opposite side at the April 29 AGM called to elect a new Generali board if the margin is less than 6%.
He also said the Caltagirone camp was “hopeful” of securing the vote of Italy’s Benetton family which owns around 4% of Generali and is yet to take sides in the feud pitting the construction magnate against Generali’s board and its main investor Mediobanca.
The holding company of the Benetton family was not immediately available for comment.
The tussle for control of the Italian giant – which also ranks as Europe’s third largest insurer – has called into question the reappointment of CEO Philippe Donnet, who was put forward by Generali’s board for a third mandate.
With a stake of more than 9%, Caltagirone is the second-biggest investor in Generali, behind Mediobanca which owns just under 13%.
To counter Caltagirone’s weight and that of fellow Italian billionaire Leonardo Del Vecchio, who is Generali’s No.3 investor with a stake of around 8%, Mediobanca has borrowed shares in Generali to give it a 17.2% voting stake at the AGM.
Mediobanca can also count on the vote of Italy’s De Agostini group, which plans to sell its 1.4% stake in Generali only after the AGM and has expressed appreciation for Donnet.
Costamagna said Caltagirone would challenge a victory that reflected merely Mediobanca’s borrowed shares and the De Agostini stake.
“They have about 4.5% borrowed and … the De Agostini stake is already sold … which means the day after the AGM they have 6% less,” Costamagna said.
“If they win by a margin of less than 6%, they’re not going to be legitimate anymore,” he added.
The International Securities Lending Association (ISLA) advises against using borrowed shares to vote at shareholder meetings.
In 2018, ISLA said that it “has never condoned the practise of borrowing securities for the sole purpose of voting.”
A source close to the matter told Reuters that ISLA had already written to Mediobanca regarding the use of borrowed shares.
Caltagirone and Generali declined to comment while Mediobanca was not immediately available to comment.
(Reporting by Carolyn Cohn and Pamela Barbaglia in London and Valentina Za in Milan; editing by Stephen Jewkes, Kirsten Donovan)
