Italian tycoons break up Generali pact to avoid regulatory scrutiny

MILAN (Reuters) - Francesco Gaetano Caltagirone has quit a pact with fellow Generali investor Leonardo Del Vecchio which the two Italian magnates had struck to challenge the insurer's top shareholder Mediobanca, a letter seen by Reuters showed.

Two sources close to the matter said Caltagirone's move did not stem from disagreements with fellow pact members but was intended to prevent regulators from saying the pact was not a mere consultation accord.

Caltagirone and Del Vecchio are, respectively, Generali's second- and third-largest investor. Their agreement, which was later joined by a third smaller Generali investor, related to a combined stake of over 16% in Italy's leading insurer.

Caltagirone, a construction and newspaper magnate, on Thursday informed other members he had decided to leave the consultation accord, the letter showed.

He said in the document he would present a slate of candidates for Generali's board, which comes up for renewal in April, adding a joint list of board nominees had never been among the pact's commitments.

Generali shareholders will be called to appoint a new board on April 29.

The insurer's outgoing board is drawing up a list of nominees for its renewal with the backing of Mediobanca, which owns 12.8% of Generali but has secured a temporary 17.2% voting stake for the April meeting by borrowing shares.

The Generali board's list includes current CEO Philippe Donnet, which Caltagirone and Del Vecchio want to replace.

(Reporting by Claudia Cristoferi, Gianluca Semeraro, Stefano Bernabei and Andrea Mandalà; Writing by Giulio Piovaccari; Editing by Valentina Za)

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