September 27, 2018 / 1:15 PM / 24 days ago

Mediobanca set for changes as Bollore pulls out of pact

MILAN (Reuters) - French financier Vincent Bollore has decided to pull out of a Mediobanca (MDBI.MI) shareholder pact after two decades in a surprise move that could make Italy’s most influential investment bank more of a takeover target.

FILE PHOTO: Vincent Bollore, Chairman of the Supervisory Board of media group Vivendi checks his mobile phone while attending the company's shareholders meeting in Paris, France, April 19, 2018. REUTERS/Charles Platiau/File Photo

Bollore, Mediobanca’s second biggest shareholder, opted to withdraw due to his increasing financial commitment to French media giant Vivendi (VIV.PA) and a need to keep assets more flexible, Mediobanca said in a statement on Thursday.

The move, which follows a similar decision by smaller Italian investor Italmobiliare (ITMI.MI), means the shareholder pact will automatically dissolve on Jan. 1, leaving investors free to sell their stakes.

However, Mediobanca said Bollore, who holds 7.9 percent of the merchant bank, had made it clear in a letter he intended to hang on to the stake.

A source close to the matter said Bollore would remain an investor, at least for now, adding he would book a small capital gain in case of a full exit. Based on Wednesday’s closing price, the stake was worth around 645 million euros ($755 million).

A second source familiar with the matter said core investors at the bank were now considering creating a lighter shareholder pact without Bollore that could rope in just under 20 percent of capital.

The pact would remain in force until 2020 when the current board comes up for reappointment, the source said.

The pact, which 15 years ago accounted for around 60 percent of capital, currently locks in 28.47 percent.

Bollore’s decision to leave the pact would not affect his other investments in Italy and both he and Vivendi remained long-term shareholders in Telecom Italia (TIM) (TLIT.MI) and Mediaset (MS.MI), the first source said.

Vivendi, which has been looking to build a southern European media giant, is the largest shareholder in TIM but lost control of the Italian phone group in May to activist fund Elliott.

TIM’s share are down 51 percent since Vivendi first invested in the Italian phone group back in mid-2015, leading the French investor to write down its stake earlier this year.

It also has just under 30 percent of Mediaset but has got bogged down in a legal spat with the TV broadcaster controlled by former Italian Prime Minister Silvio Berlusconi.

“Given the poor performance of his Italian investments and uncertainty created by the new populist government, it could be a first step to reassessing Italy,” said IG analyst Vincenzo Longhi.

CHANGING ROLE

Mediobanca, the leading shareholder in Italy’s top insurer Generali (GASI.MI), was for years at the heart of Italian finance with key stakes in a number of leading companies.

But in recent years it has sold most of those stakes to focus on traditional banking and plans to sell down its stake in Generali to help fund its wealth management business.

Last year Generali fended off a takeover bid from Italy’s biggest retail bank Intesa Sanpaolo (ISP.MI).

“Bollore’s move certainly increases the M&A appeal of Mediobanca as the pact’s grip loosens and prospects improve,” a Milan-based analyst said.

Under the stewardship of CEO Alberto Nagel Mediobanca has become leaner and more profitable and reported record revenues in its last financial year.

Other key shareholders in Mediobanca include Italy’s biggest bank UniCredit (CRDI.MI), asset manager Mediolanum MED.MI and the Benetton family’s holding company Edizione.

UniCredit, the biggest shareholder with 8.4 percent, has not announced any decision on its commitment to the pact.

($1 = 0.8542 euros)

Additional reporting by Gwenaelle Barzic in Paris and Paola Arosio and Gianluca Semeraro in Milan; Editing by Keith Weir

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