Mediobanca's Nagel bets on final makeover act to fend off Italian rival

Reuters

13-06-2025

MILAN, June 13 (Reuters) - Mediobanca (MDBI.MI), opens new tab shareholders will vote on Monday on the final act of an overhaul its CEO Alberto Nagel began three decades ago to turn a bank born to fund Italy Inc's postwar reconstruction, into its No. 2 wealth manager.
To stave off a hostile bid from state-backed Monte dei Paschi di Siena (MPS) (BMPS.MI), opens new tab, Nagel in April proposed buying private bank Banca Generali (BGN.MI), opens new tab. His plan, part of a game of chess to reshape Italian finance, crucially involves severing Mediobanca's historic ties with the target's owner, insurance giant Assicurazioni Generali (GASI.MI), opens new tab.
It is a bold bet to protect Mediobanca's independence and Nagel's own legacy at a pivotal time for Italian banking.
The 60-year-old keen off-piste skier and tennis fan, joined Mediobanca in 1991, dedicating his entire career to the bank. He began his quest to transform Mediobanca at the end of that decade when he managed to convince co-founder Enrico Cuccia that Mediobanca should start managing the money its clients pocketed from transactions Nagel handled as head of investment banking.
Made CEO in 2008, Nagel set out to steer the bank away from its role as the lynchpin of Italian capitalism, sitting at the heart of an intricate web of corporate shareholdings.
"That role was necessary when Italy's capital market was small and closed," Nagel told Reuters last week.
"Once outside capitals started flowing in, and the big foreign banks arrived, I knew Mediobanca had to transform," he said, speaking at the bank's headquarters, a 16th century aristocratic mansion nested behind Milan's La Scala opera theatre.
Now, Nagel is marketing the proposed 6.3 billion euro Banca Generali deal using a 13% stake in its parent Generali as an alternative to the MPS offer, betting it could render Mediobanca too big for its smaller rival to swallow.
He also hopes it will allow him to win over two investors who have long been a thorn in his side and are now backing MPS' takeover attempt - Delfin, the holding company of late Ray-Ban owner Leonardo Del Vecchio, and construction tycoon Francesco Gaetano Caltagirone.
Both, who are also major Generali shareholders, have repeatedly clashed with Nagel and accused him of relying excessively on income from the insurer while holding back its growth, which Nagel rejects.
In the latest twist of the years-long confrontation, Delfin and Caltagirone have recently become the top shareholders in Mediobanca's suitor MPS.
Nagel, who used to drive a Fiat Panda, rarely gives interviews and generally keeps a low profile, has come to embody the understated power and influence of the institution whose identity he is now fighting to preserve.
Though one of his first moves as CEO was to secure retail funding for a bank that had no depositors, and he has steadily grown the lender's consumer finance business, Nagel sees a culture clash in a tie-up with a commercial bank like MPS.
Still, he broke with Mediobanca's past in 2013, outlining plans to sell all of its corporate holdings except for the Generali stake, and to expand the investment banking business abroad, eventually buying up boutiques such as London-based Arma Partners.
The wealth management business, meanwhile, progressed only slowly, taking off in earnest only in 2015-2016 when Mediobanca bought out its partner in a joint venture and made a series of acquisitions.
Nagel hunted for years for a wealth management target, but the sector commanded big valuations and returns from the Generali stake he would dispose of to fund a deal were hard to match.
Banca Generali would boost wealth management to account for 45% of revenues, from a quarter at present, and 50% of profits from one fifth now.
"We'll achieve what would have otherwise taken us eight to 10 years," Nagel said when presenting the deal.
Monday's vote will show whether his bank can ward off MPS and make that leap, but he can already count on some investors.
"Mediobanca swapping the (Assicurazioni) Generali shares for Banca Generali is such a tectonic shift," said Cole Smead, CEO of Arizona-based Smead Capital Management, who welcomed the plan as an overdue modernisation of Mediobanca's capital structure.
"They're cutting the umbilical cord, for us that's a good thing," Smead said.
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