The maneuvers begin in view of the decisive meeting of June 16th, in which the members of Mediobanca will have to express their opinion on the takeover bid launched last April 27th on General Bank. And the first to take the field is the ISS proxy advisor – Institutional shareholder services, which advises Piazzetta Cuccia shareholders on vote in favor of the offer, while not hiding the existence of "not insignificant uncertainties on the success" of the operation, also deriving from the "context made more complex by the hostile approach of Ps".
What are proxy advisors and what do they do?
Proxy advisors are firms that specialize in analyzing corporate disclosures and providing Advice to investors on how to vote at the general meeting of shareholders. At global level, there are three main proxies: Iss, Glass Lewis and Frontis.
Their role is to fully and exhaustively analyze the situation and recommend to investors how to vote on a given proposal. They are usually listened to a lot and are therefore able to influence the outcomes of the various votes. Based on what has been seen in the recent past, in fact, in the vast majority of cases institutional investors (from Blackrock to Amundi, from Allianz Global to Bnp Paribas) tend to align with the recommendations provided by the proxies, voting as advised by them.
Iss: Mediobanca shareholders should vote in favor of the takeover bid
And now we come to the recommendation of Iss on Mediobanca. In view of the meeting of June 16, the proxy advisor advised the shareholders of Piazzetta Cuccia to vote in favor of the takeover bid on Banca Generali.
According to ISS, in fact, "the operation is supported by a solid rationale”, “would significantly accelerate the strategic transformation of Mediobanca” and “would be clearly increasing in value”. The offer could also contribute to the strengthening of Mediobanca in the wealth management: “The completion of the transaction would significantly accelerate this path, improving the revenue mix, rating and valuation multiples,” the proxy writes.
Iss's uncertainties: "Mps's hostile approach and "the Government's decisions"
So far a full promotion. But there are also some “non-negligible uncertainties on the success of the operation”, which “is presented against the backdrop of thehostile approach of Mps".
Regarding the takeover bid launched by Monte dei Paschi on Piazzetta Cuccia, the proxy advisor writes that "while the integration with Banca Generali, in itself, should not be a problem, considering Mediobanca's experience in mergers and acquisitions and the cultural compatibility between the two companies, the recent Government decisions and its support for the offer of MPS could lead to further risks for the success of the operation".
In this context, it should also be remembered that last April, ISS had recommended to the shareholders of Monte dei Paschi to vote against the capital increase (which was later approved anyway) in service of the takeover bid launched on Mediobanca.
Returning to today's recommendation, “we note that the integration of Mediobanca and Banca Generali in succession it could turn out to be a significant challenge for Mps“, adds ISS, referring to the fact that Siena “has made it clear that it believes that the offer for Banca Generali is not in conflict with its offer for Mediobanca”.
“Regardless of this and considering the intrinsic risks of an integration with MPS – writes ISS -, we believe that at this point there are no fears that the support for Mediobanca's offer for Banca Generali will block an attractive or superior alternative offer for Mediobanca”, also because “Mediobanca shares are currently being exchanged for a significant premium compared to the offer equivalent of Mps”. The stock market value of Mediobanca is in fact equal, as of today, to 20,74 euros per share compared to the 15,992 euros offered by Monte dei Paschi. In light of all these elements, Iss believes that “the proposal deserves the support of shareholders”.
