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Mediobanca Said Planning to Pare Telecom Italia, Generali Stakes

Mediobanca SpA (MB) is preparing to cut its holdings in Telecom Italia SpA (TIT) and Assicurazioni Generali SpA (G) as the bank seeks to fund its expansion abroad, according to a person with direct knowledge of the lender’s strategy.

Mediobanca, Italy’s biggest publicly traded investment bank, is cutting the stakes to reduce swings in profit while investing outside its sluggish home market, the person said, declining to be identified before an announcement. The Milan-based bank will present the plan June 21.

Mediobanca, founded in 1946, has used a web of holdings in the country’s biggest companies to dominate the nation’s dealmaking for decades, a grip it is losing as investments soured. Chief Executive Officer Alberto Nagel is focusing the bank on growth abroad as Italy’s longest economic slump in 20 years hurts corporate activity and leads to rising defaults on bank loans.

An official for the company declined to comment when contacted by Bloomberg News.

The lender will seek to exit shareholder agreements and is preparing to sell shares of Generali, the country’s biggest insurer, and Telecom Italia, the nation’s No.1 phone company, according to the person. Its stake in Generali may fall to about 9 percent from the current 13 percent, the person said.

The company also plans to hire bankers for its corporate and investment banking businesses in London, Frankfurt and Madrid, according to the person. There are no plans to open new offices, the person said.

Mediobanca, which has a market value of about 4.2 billion euros ($5.6 billion) posted a net loss of 86.6 million euros in the three months ended March 31, its fiscal third quarter, compared with a profit of 41.5 million euros a year earlier. The shares closed down 1.3 percent at 4.90 euros.

MF reported on the plans on June 15.

To contact the reporter on this story: Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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