Mediobanca (MB) SpA is leading an investor group that’s seeking to remove Assicurazioni Generali SpA (G) Chief Executive Officer Giovanni Perissinotto because the investment bank wants to improve the performance of Italy’s biggest insurer, two people familiar with the situation said.
Perissinotto was summoned to Mediobanca’s Milan headquarters and asked to resign by Alberto Nagel, the bank’s CEO, and Chairman Renato Pagliaro, said the people, who asked not to be identified because the matter isn’t public.
Generali’s CEO refused to step down and investors led by Mediobanca, the insurer’s biggest investor with a 13.2 percent stake, plan to push for his ouster at a board meeting the insurer has called for tomorrow, one of the people said. Mediobanca declined to comment on the matter, as did a spokesman for Generali.
“The problem with Generali is governance, which needs to be improved,” said Emanuele Vizzini, who oversees about 800 million euros ($988 million) as chief investment officer for Investitori Sgr in Milan. “You need to remove the interference of investors that have direct and conflicting interests.”
Mario Greco, an executive at Zurich Insurance Group AG, will be proposed as a replacement for Perissinotto, one of the people said. Greco is a former CEO of Italian insurer Riunione Adriatica di Sicurta SpA.
Generali rose as much as 7 percent, to the highest in two years, and was up 5 percent to 8.62 euros at 11 a.m. in Milan trading, giving the company a market value of 13.4 billion euros. The shares have fallen 29 percent this year, compared with the Bloomberg Europe 500 Insurance Index’s 4 percent decline.
“We think investors had a good feeling with Greco and would be pleased by his appointment,” Matteo Ghilotti, an analyst at Equita SIM SpA, wrote in a note today.
Generali, based in the northern city of Trieste, said May 11 that first-quarter profit fell 7.9 percent, less than estimated by analysts. Perissinotto, 58, said at the time that he expects “strong” profit this year as the company reduces costs and sells assets to strengthen capital.
Generali cut its dividend for 2011 by 25 cents to 20 cents a share after net income declined to 856 million euros from 1.7 billion euros a year earlier. Profit was hurt as the insurer wrote down the value of Greek bonds by 76 percent.
Perissinotto, who met Mediobanca’s executives May 30, accused the investment bank of acting in its own interests in a letter he wrote to board members, a copy of which was obtained by Bloomberg News.
Mediobanca has put “its interests above those of this company, its policyholders, employees and the vast majority of its shareholders,” Perissinotto wrote in the letter.
“Mediobanca has obstructed Generali management efforts to diversify risk into new high-growth areas,” because this might have led to dilution of shares and “reduced influence for Mediobanca over the group” given the investment bank’s unwillingness to subscribe to a capital increase.
Generali, which gets about 13 percent of its operating income in central and eastern Europe, is expanding in emerging markets to boost earnings following the financial crisis. The insurer has repeatedly said that it’s focused on organic growth, ruling out a capital increase.
“I have no intention of submitting to the motion of no-confidence that Mediobanca has already informed me will be presented to me or of resigning my post of group chief executive,” Perissinotto wrote.
Perissinotto joined Generali as an intern at the company’s U.K. branch in 1979. He was appointed co-CEO in 2001 and sole CEO in 2010. The Financial Times reported the attempted ouster yesterday on its website.
Generali needs new management which can focus on the insurer’s main business and avoid financial investments, Luxottica Group SpA founder and Generali investor Leonardo Del Vecchio told Corriere della Sera in an interview in April.
Del Vecchio, who owns a 3 percent stake in Generali, is among shareholders calling for Perissinotto’s replacement, one of the people said. Francesco Gaetano Caltagirone, with a 2.3 percent stake, and Lorenzo Pellicioli, CEO of De Agostini SpA, which owns a 2.4 percent stake, also back the ouster, the person said.
Mediobanca is leading a rescue plan for Fondiaria-Sai SpA, the country’s second-biggest insurer after Generali, by supporting a proposal of Unipol Gruppo Finanziario SpA to carry out a merger.
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