January 29, 2020 / 1:02 PM / a month ago

Mediobanca down 1% on fears Mediolanum could sell stake

MILAN, Jan 29 (Reuters) - Shares in Mediobanca fell 1% in Milan on Wednesday with traders pointing to the risk of a share placement after investor Banca Mediolanum said it no longer considered its 3.3 stake in the lender strategic.

Mediolanum on Tuesday said it was classing the stake among assets held “to collect and sell”, citing “great uncertainty” over governance due to the presence of billionaire Leonardo Del Vecchio as Mediobanca’s new top investor.

The reclassification of the stake would make it easier for Mediolanum to sell it, although Chief Executive Massimo Doris told Reuters that the move did not imply a decision to do so.

Mediobanca was not immediately available to comment.

Reiterating a “buy” rating on the stock, Kepler Cheuvreux on Wednesday cited low visibility on the future governance of the Italian merchant bank as a source of concern.

In a surprise move last year Del Vecchio, the 84-year-old founder of eyewear giant Luxottica, built a stake of just under 10% in Mediobanca and sources have said he may raise it further - a move which would require a green light from banking supervisors.

“We believe that current governance movements represent a risk for the story and we have applied a governance discount to our target price given that there is no clarity on the strategy of the new shareholder,” Citi analysts wrote in a note.

By 1157 GMT shares in Mediobanca were 1% lower, underperforming a 0.4% rise in Italy’s banking index .

After sharply criticising the strategy of Mediobanca Chief Executive Alberto Nagel, Del Vecchio said targets set under a new plan to 2023 Mediobanca unveiled in November went in the right direction.

Del Vecchio had accused Nagel of relying excessively on earnings reaped from a 13% stake in Generali, through which Mediobanca effectively controls Italy’s biggest insurer.

Del Vecchio is also an investor in Generali with a 4.8% stake. (Reporting by Gianluca Semeraro and Giancarlo Navach; Editing by Kirsten Donovan)

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