MILAN: Monte Paschi shareholder PLT Holding submitted a slate of candidates for the bank’s board renewal, proposing outgoing chief executive officer (CEO) Luigi Lovaglio stays on in a move that is likely to set up a showdown over leadership weeks before a pivotal shareholder vote.
The Tortora family investment vehicle PLT, which holds more than 1.2% of Banca Monte dei Paschi di Siena SpA’s shares, put forward a list of 12 candidates for the board of directors to ensure continuity of Paschi’s strategic plan and support execution of its ongoing transformation, it said in a statement last Saturday.
The list also includes former UniCredit SpA chairman Cesare Bisoni taking on the same role at Paschi.
The move comes after the current board excluded Lovaglio from its proposed slate of board candidates for the upcoming shareholder meeting, effectively laying the groundwork for his exit months after completing the takeover of competitor Mediobanca SpA.
The list is intended as an “open” proposal to shareholders aligned with its objectives and the founding principles of the initiative, PLT said.
PLT became a Monte Paschi shareholder after tendering its Mediobanca shares into last year’s takeover offer.
“We backed the bid because we were convinced by the industrial plan presented by Lovaglio,” chairman Pierluigi Tortora said in an interview.
Lovaglio “successfully led the bank in completing the restructuring process initiated in the past, and has made an essential contribution in outlining the development path for the near future,” Tortora said.
“A break in the bank’s management could create instability, slow the integration, and ultimately destroy value.”
Earlier this month, Monte Paschi approved a list of candidates for the next board that identified Acea SpA CEO Fabrizio Palermo, former Illimity CEO Corrado Passera, and former UniCredit SpA top executive Carlo Vivaldi as eligible for the top role.
Lovaglio’s exclusion came after mounting tensions with some directors and shareholders over the timing and scope of his strategic plans, people familiar with the matter have said.
Lovaglio, 70, last year pulled off the takeover of Mediobanca for US$20bil, a transaction widely seen as a remarkable achievement. He took on the CEO role four years ago and oversaw a sweeping restructuring that restored Siena-based Monte Paschi to profitability after years of turmoil.
More recently, however, Lovaglio’s faced a series of headwinds, including a judicial probe related to the Mediobanca deal; he’s denied wrongdoing.
The plan he presented earlier this month for the integration of Mediobanca failed to impress shareholders.
PLT hasn’t had contacts with Delfin Sarl and the Caltagirone group, Monte Paschi’s largest investors, nor with any other shareholder, Tortora said, adding that the holding and the list candidates are available to engage with investors to explain their plan.
“We are aiming for a majority at the next shareholders meeting to ensure continuity,” he said.
The competing lists will be voted on at a shareholder meeting set for April 15. While the formal appointment of the next CEO rests with the new board, the number of directors elected from each list will signal the likely outcome. — Bloomberg
