January 28, 2020 / 7:27 PM / 20 days ago

Mediolanum says Mediobanca stake no longer strategic

MILAN (Reuters) - Italian asset manager Banca Mediolanum (BMED.MI) said on Tuesday its 3.3% stake in Mediobanca (MDBI.MI) was no longer strategic, given the uncertainty over the bank’s future governance after billionaire Leonardo Del Vecchio became its top investor.

FILE PHOTO: A logo of Mediobanca is pictured at Mediobanca headquarters in Milan, Italy, November 12, 2019. REUTERS/Flavio Lo Scalzo

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

It did however reflect the “great uncertainty” created by Del Vecchio’s presence, Doris said. “The concern is not Del Vecchio per se but the possible new balance of power,” he said.

Del Vecchio, the 84-year-old founder of eyewear giant Luxottica, last year stunned Italy’s business elite by acquiring a stake of just under 10% in Mediobanca, once a powerhouse of Italian capitalism.

He became the single biggest investor in the storied Milanese bank when UniCredit (CRDI.MI) liquidated its holding in a surprise move at the end of the year.

Mediolanum said in a statement that it wanted to have more flexibility over the stake in light of possible changes in its future governance, and so was no longer classing it as strategic but among assets ‘held to collect and sell’.

The stability of Mediobanca’s investor base for decades relied on a shareholder pact that bound together the top names in Italian business and finance, who were not free to sell their stakes in the bank.

The pact became a mere consultation agreement in December 2018, and restrictions on disposing of the stakes were dropped.

“There used to be a pact over 38% of the bank’s capital and now there’s one over 12.5%, then Del Vecchio arrived and everybody’s wondering whether he’ll go above 10%,” Doris said.

“He could become stronger than the pact,” he added.

To cross the 10% threshold, Del Vecchio requires authorization from banking supervisors. An Italian minister said earlier this month Del Vecchio had filed no such request at present.

Mediolanum said it would book a 67 million euro impairment on its Mediobanca shares, which it valued at 9.826 euro each. Mediobanca shares closed up 3.1% on Tuesday to 9.58 euros, having risen more than 20% over the past year.

Doris said Mediolanum was happy with how Mediobanca was managed.

Additional reporting by Gianluca Semeraro; Editing by Jan Harvey

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