Key Takeaways:
(P1) Monte dei Paschi di Siena’s new board formally reinstated Luigi Lovaglio as chief executive, handing his supporters 8 of 15 board seats to consolidate control and advance his plan to merge with Mediobanca. The appointments on April 23 end weeks of boardroom turmoil at Italy's oldest bank.
(P2) The winning faction, led by small investor PLT Holding, will also take the chairmanship and lead all board committees, a person close to the matter said. Proposals for a compromise from the opposing faction, which includes shareholder Francesco Gaetano Caltagirone, were rejected.
(P3) At the April 15 shareholder meeting, a list backed by PLT Holding secured 49.9 percent of the vote, defeating the outgoing board's list which received 38.8 percent. This gave Lovaglio's allies a clear majority with eight directors, compared to six for the opposition, on the 15-member board.
(P4) With governance control secured, Lovaglio is positioned to execute on his strategy centered on integrating Mediobanca, which MPS acquired last year. To help fund a potential acquisition of rival Banco BPM, Lovaglio is reportedly considering the sale of a 7.4-billion-euro ($8.64 billion) stake in insurer Generali, a move that would reshape the bank's future after its 2017 state rescue.
The board appointments mark a decisive victory for Luigi Lovaglio, who was ousted as CEO in March before being brought back by a shareholder vote. The new board named Cesare Bisoni, a professor and former president of Unicredit, as the new MPS chairman. Flavia Mazzarella and Charles Corradini, both from the winning PLT list, were appointed as vice-presidents.
The appointments were made with favorable votes from only the eight directors representing PLT Holding, signaling no concessions to the minority shareholders. This strong governance structure is designed to quickly implement the industrial plan Lovaglio presented before his brief departure.
The core of Lovaglio's strategy is the merger with Mediobanca, which is expected to be put to a shareholder vote this summer. The acquisition of Mediobanca made MPS a key investor in Generali, Italy's largest insurance group.
The bank, which was bailed out by the Italian government in 2017, was reprivatized between 2023 and 2024. The process saw the government's stake fall from 68 percent to below 5 percent, with backing from international funds and prominent Italian families like the Del Vecchios, whose Delfin holding company supported Lovaglio's return. The potential sale of the Generali stake is seen as a key step to finance further consolidation, with Banco BPM viewed as a primary target.
This article is for informational purposes only and does not constitute investment advice.
