All the skirmishes in Mediobanca and on Nagel
The article by Emanuela Rossi
An awaited appointment that will also serve to understand the real value of the forces in the field. The meeting scheduled for Wednesday 28 October will not only serve to elect the new Mediobanca board of directors: it will be the test of the current board and the ability of new enterprising subjects, starting with Leonardo Del Vecchio and Piazzetta Cuccia is the largest shareholder with 10.16% of the capital through the Luxembourg safe Delfin. On this occasion he will be able to continue to send other strong and clear messages, as he knows how to do. Meanwhile, some important shareholders are lining up and the proxy advisors are providing their voting indications to institutional investors.
THE THREE LISTS IN THE RACE
There are three lists presented at the meeting: that of the board, which re-nominates the president Renato Pagliaro and the CEO Alberto Nagel, and the two minority lists, that of Assogestioni, the association that brings together the asset management companies, and that of of the activist fund Bluebell, founded by Giuseppe Bivona together with Marco Taricco . At the moment, given the indications of the proxy advisors, the Assogestioni list seems to be heading towards a sound defeat while some Bluebell candidates could find space on the board of directors where the majority should remain firmly in the hands of Nagel and Pagliaro.
THE CHANCE OF THE BOARD LIST
The list concocted by the CEO Nagel starts from a solid base, equal to 20% of the capital, i.e. the shares held by the Breton financier Vincent Bollorè (5.6%) which in the next six months should drop to 2.5% and whose 32-year-old daughter, Marie, is leaving the board and the consultation agreement (12.6%) which brings together Mediolanum, Fininvest, Benetton, Unipol Sai, Generali, Fca, Italmobiliare, Pirelli and Telecom Italia, Gavio and Ferrero.
At least some of the institutional investors should be added to these. In favor of the current board of directors of Piazzetta Cuccia, as mentioned above, is Ennio Doris, president of Mediolanum, who holds 3.28% of the shares. “I will vote 'naturally' for the list of the outgoing board” Doris told Corriere della Sera adding: “I have known Mediobanca since 1996 for the placement of Mediolanum. The diversification that the bank has made in asset management, consumer credit and then retail of CheBanca! it was a great strategic intuition, perfectly executed. Enrico Cuccia's legacy is to have transmitted the vision that the bank must be a protagonist in the long term. Cuccia saw it as if he were the owner and it is a corporate culture transmitted to Maranghi and from there to others afterwards: to be a successful company in a changing world ".
Doris then continued in her defense of the current leaders, highlighting that the industrial plan must “continue along the path taken. Mediobanca is increasingly international as an investment bank and is the absolute leader in Italy: it has recently followed the largest operations: Borsa-Euronext, Nexi-Sia, Fca-Peugeot, Ubi-Intesa. Consumer credit still needs to be developed and remains with Generali. I disagree with those who say they must sell 13% and give it to shareholders because Generali is the Italian company with the most weight in the insurance and financial market, including international. I believe in national champions ”. The chairman of Mediolanum also sent a message to the owner of Essilor-Luxottica. “I don't know what Del Vecchio intends to have – he noted -. The latest statements were in favor of management. As a savings industrialist, I say that this management must go ahead because what it has done is a guarantee for the future ”.
THE ENDORSEMENT OF THE PROXY ISS AND GLASS LEWIS IN FAVOR OF THE BOARD
Meanwhile, a clear stance by proxy advisors is emerging in favor of the board list and that of Bluebell to the detriment of that of Assogestioni. Both Glass Lewis and Iss have advised Mediobanca shareholder funds to vote on the list presented by the board and have declared that they do not share the overall vision of the fund led by Bivona "on the alleged loss of competitive position and on the downward trajectory" of Piazzetta Cuccia to appreciate it alternative ideas and judging the candidates on the list as qualified.
Furthermore, according to ISS, the board of directors' list "is adequately positioned to represent the long-term interests of minority shareholders and carry out independent supervision of managerial action". As for the other two contenders, the proxy highlighted that voting in favor of the board "would allow Bluebell to still have representation on the board, but restricting his influence" on top management thanks to "two new independent directors who could contribute to the debate on strategies without necessarily signaling the urgency of a change in strategic direction ".
THE ENDORSEMENT OF THE PROXY FRONTIS IN FAVOR OF BLUEBELL
Explicitly in favor of Bluebell's list, on the other hand, is Frontis which was the first to express itself with a heavy torpedo aimed at Nagel's salary . "All 4 candidates included in the slate presented by BlueBell and Novator are independent from the bank and its shareholders and, in our opinion, possess a wealth of skills and experience to effectively support the Board in its management and supervisory roles" he wrote the proxy in his analysis recalling that “BlueBell Capital Partners is an activist investor who sent a letter to Mediobanca in June 2020, criticizing some governance practices and suggesting changes in the Bank's strategy and operational efficiency. In particular, BlueBell criticizes the lack of separation between management and control within the Board, for the statutory provision that the 'majority list' includes 3 executives (2 if the Board is composed of fewer than 14 members) employed by the group for at least 3 years, which represents a managerial rooted tool ".
Frontis then highlighted that although "the quality of the information" is "good (all terms and conditions are disclosed and the long-term objectives are quantified)" and the variable remuneration is "effectively structured to align the interests of executives and shareholders in the long term ", however" we have concerns about the possibility of paying an extraordinary variable remuneration to the non-executive chairman and we consider the CEO's basic salary (1,900,000 euros) excessive, which is used to define the amount of the variable remuneration ".
THE SATISFACTION OF BIVONA (BLUEBELL)
The indications provided by the proxies made Bivona smile. "The real message" that arrives, he declared on Thursday commenting on the statements of Glass Lewis and Iss, "is that no one has indicated the Assogestioni list, which were the ones who had been indicated in 2017 and who are the real losers" of the match. that is being played in view of the assembly. And again: "Fortis called for a board with 4 directors from Bluebell and 11 from the board, Iss wanted 13 from the board and 2 from Bluebell and Glass Lewis said 13 from the board and did not express preferences between Assogestioni and Bluebell". In short, according to Bivona, the news is that “no proxy has indicated Assogestioni, we are an alternative minority list to Assogestioni and certainly not to the majority one and therefore we believe we have done a good job. This is the best prospect we could have had ”.
AND WHAT WILL THE OLD MAN DO?
If the current top management of Mediobanca does not seem to have to fear overturns, it will still be interesting to understand what the 85-year-old Del Vecchio will do, who in August obtained the green light from the European Central Bank Supervisory Authority to increase the merchant bank to 20% as a "financial investor" perhaps to then be able to increase its stake in Generali, currently at 4.84%. "Delfin is now the main partner" of Mediobanca "and is determined to remain so for a long time, ready to support the growth of the institute and to support projects that I hope will be ambitious" said the entrepreneur from Veneto after the announcement of the climb over 10% of the capital. Here, it is a question of understanding how Del Vecchio intends to stay in Piazzetta Cuccia and whether Nagel should fear a thorn in his side. As for relations with the CEO of Mediobanca, on that occasion he explained that he "always had respect for the managers of the companies in which I am an investor" and that he personally called Nagel "to inform him of the green light from the ECB to go beyond the 10% ".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/tutte-le-schermaglie-in-mediobanca-e-su-nagel/ on Sun, 18 Oct 2020 13:17:39 +0000.