The probe gripping Italy’s banking industry
The insurer at the heart of the deal upending Italian finance
The bank takeover that has gripped Italy’s finance sector this year was orchestrated by a secret alliance going after a stealth target, prosecutors are alleging.
DD readers are familiar with the back story. In January the state-backed bank Monte dei Paschi di Siena (MPS) launched the takeover of rival lender Mediobanca, shocking markets and analysts.
The €17bn acquisition was finalised in September. But the saga didn’t end there.
Last week the FT reported that Italian prosecutors were investigating MPS boss Luigi Lovaglio and top shareholders for alleged market manipulation and obstruction of supervisory functions in connection with the takeover. Now, a search and seizure warrant seen by the FT casts the takeover in a new light.
According to prosecutors, MPS’s real target was not Mediobanca, but the insurer in which Mediobanca is the largest shareholder: Generali.
The warrant alleges that Lovaglio and billionaire investors conspired to execute the takeover with Generali as the ultimate prize.
Generali is one of the largest holders of Italian sovereign debt, making it a crucial player in the country’s financial services industry.
The insurer’s chief executive, Philippe Donnet, has been a longtime target of billionaire investors Francesco Gaetano Caltagirone and the Del Vecchio family, which runs the eyewear giant Luxottica and the holding company Delfin. Both are major investors in Generali and acquired substantial stakes in MPS over the past year.
Prosecutors are alleging they used MPS as a vehicle to execute a broader plan to seize control of Generali without launching a costly full-blown takeover.
They allege Caltagirone, along with Delfin, co-ordinated efforts and investment decisions for years without informing the market or regulators, ultimately enlisting MPS chief executive Lovaglio to execute their plan.
Lovaglio, Delfin and Caltagirone have always denied the takeover of Mediobanca was a strategy to install a friendly chief executive at Generali.
MPS said it was “confident it can provide all the necessary information to clarify the correctness of its actions” and is co-operating with authorities.
Yet the probe could make it more difficult for investors to oust Donnet ahead of the end of his term in 2027, and could also complicate MPS’s integration of Mediobanca.