By Gianluca Semeraro
MILAN (Reuters) -The holding company of late Italian billionaire Leonardo Del Vecchio got the green light to raise its stake in Generali (BIT:GASI) above 10%, sending shares in the insurer higher in anticipation that a battle for control will resume.
Founded by the eyewear tycoon who died a year ago, holding company Delfin is also the largest shareholder in Mediobanca and the latest move brings the complicated relations between the investment bank and Generali back into focus.
Delfin, which registered to vote with a 9.8% stake at Generali's annual meeting in April, said on Monday that the higher stake approval was a technical issue and did not have any strategic significance for Italy's biggest insurer.
Italy's insurance watchdog IVASS said it had authorised Delfin to own more than 10% of Generali after the company inadvertently crossed the threshold because of a share buyback.
Generali shares rose as much as 5.6% in early trade and were up 3.5% by 1100 GMT, giving the company a valuation of around 30 billion euros.
"We believe that the authorisation of IVASS to rise (the stake level) from 10% to 20% will increase again the speculative appeal on Generali (and indirectly on Mediobanca), however, it remains to be assessed," Equita wrote in a research note.
SHAREHOLDER BATTLES
Generali and Mediobanca have been at the heart of shareholder battles mainly involving the late Del Vecchio and his ally and fellow billionaire Francesco Gaetano Caltagirone.
The power struggles around Mediobanca and Generali have pitted a core of Italian shareholders in two of the country's most storied financial companies against international institutional investors.
A year ago rebel investors in Generali, led by Caltagirone, lost a shareholder vote to oust Chief Executive Philippe Donnet, who was handed a new three-year mandate, ironically helped by the support of leading investor Mediobanca.
Last week, Caltagirone told a parliamentary hearing that Generali's governance set-up, whereby the outgoing board puts forward a list of candidates to name new directors, allowed Mediobanca to excessively influence the insurer.
Mediobanca's board comes up for renewal in the autumn with Chief Executive Alberto Nagel, at the helm since 2008, running for reappointment.