Here’s how Del Vecchio will attack Mediobanca and Generali
Moves, numbers and scenarios on Del Vecchio in Mediobanca and Generali. The article by Fabio Pavesi, an expert in finance and banking journalist already at Sole 24 Ore, for Affaritaliani
Forty million euros of potential gain on 195 million of invested capital. A 20% capital gain in just 3 months is the performance snatched by Leonardo Del Vecchio in his latest blitz on Mediobanca shares. Whether or not he may become the absolute master of Piazzetta Cuccia, also able to determine its future strategies, does not matter. His climb to the only true Italian investment bank already has the flavor of full success.
Leonardo Del Vecchio, 85, gave a further shock to his share purchases that led him in recent days to hold 13.2% of the bank's capital. A step forward to reach the 20% that will make him the first absolute shareholder of Mediobanca.
Purchases got buoyant between 2020 and 2021. In November last year, it bought a total of 7.4 million shares in small packages. In December it rounded up with another 8 million shares and in January it corroborated shopping with 10.5 million shares. In three months, Del Vecchio through his Luxembourg holding company Delfin added 26 million to his stock of Piazzetta Cuccia.
The average loading price of the last binge is around 7.5 euros. Today the stock is quoted just over 9 euros, already recording an implicit capital gain of that additional 3% package of 40 million euros. A nice potential gain of 20% in just over three months. While obviously everyone is wondering what Del Vecchio will do with "his" Mediobanca and indirectly with that 13% of Generali that the investment bank has always had in his belly, when he reaches 20% of the capital, the 85-year-old ex Martinitt enjoys the quality of your financial investment.
Of course Del Vecchio will certainly not be a silent first shareholder. In the past, he has expressed several times on the need to give greater dynamism both to the typical businesses of Mediobanca and above all to Generali of which Mediobanca is the first shareholder. Del Vecchio reproaches Generali with sleepy strategies. For the founder of Luxottica, the Lion of Trieste has too low a critical mass to compete with European insurance giants such as Axa and Allianz three times larger than Generali.
And as the main shareholder of Mediobanca, he could push Piazzetta Cuccia to launch a capital increase in preparation for equipping Generali with ammunition for m & a policies that would lead the Lion of Trieste to acquire competitors and market shares. Meanwhile, the creator of the global eyewear giant, his Luxottica, who got married to Essilor, is enjoying his new financial investment.
Which already gives the hoped-for results in terms of earnings. That 13.2% of Mediobanca's capital is worth just over 1 billion on the market today and when it has made the climb to 20% it will find itself with a package of securities worth more than 1.6 billion (at today's prices). Risk capital obviously like all equity investments, but it is difficult for the bet on Mediobanca to prove fruitless. After all, it is the only investment bank in the country and the nature of its business makes it more immune to the repercussions of the economy.
Compared to commercial banks, the credit risk is much lower and Mediobanca can count on the hefty profits deriving from corporate banking and wealth management commissions on which it has invested heavily in recent years. The fundamentals are solid and the bank has withstood the Covid crisis more than others. The accounts for the half year ended December 2020 see revenues at 1.3 billion with a net profit of 411 million. The return on tangible capital is 10% and 70% of the net profit will go into dividends.
(Extract from an article published on affaritaliani.it)
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ecco-come-del-vecchio-aggredira-mediobanca-e-generali/ on Mon, 05 Apr 2021 04:56:21 +0000.