MILAN: Union shareholders won a battle for top jobs at Italy's Banca Popolare di Milano on Saturday, packing a new supervisory board with their allies and paving the way for a private equity fund to take a 10 percent stake in the lender.
The slate of board candidates presented by the "Friends of Bipiemme" union and employee shareholder association won 4,246 votes at a crowded shareholder meeting, defeating a rival list backed by Italian banker Matteo Arpe which received 2,274 votes.
The "Friends" are allied with Andrea Bonomi, head of the Invest industrial private equity fund, which holds 2.7 percent of Pop Milano and says it is ready to raise its stake to 9.9 percent by taking part in an 800 million euro capital increase.
"I think the shareholders made the best choice for the future of the bank," Bonomi said. Arpe left the meeting without a comment.
The appointment of a supervisory board is the first step in a governance overhaul at the mutual lender demanded by the Bank of Italy, which criticised Pop Milano's opaque management and risky loan exposure after an audit in March.
The supervisory board, representing the bank's owners, will name in the next few days a separate management board with powers to run the bank's operations.
Once the new dual structure is in place, the bank will have to set the terms of the capital increase decided by the outgoing management team, and these are expected to be announced by Thursday.
The "Friends" association, which critics say had a disproportionate influence over the bank under the old structure, owns less than 4 percent of the bank but controls shareholder meetings because of a one-head-one-vote rule.
They picked Filippo Annunziata, a tax accountant and economics professor at Milan's Bocconi university, as the chairman of the supervisory board and said they wanted to keep Enzo Chiesa, currently Pop Milano's director general, as CEO.
The power struggle was closely watched by the Bank of Italy, which had asked for a complete overhaul of the lender's top ranks.
Sources close to the situation said the regulator had reiterated its call for a clear break with the past in a letter sent to the lender on Saturday, suggesting it may not be satisfied with Chiesa staying on.
In any case, the bank's new management needs to move quickly to decide the terms of the capital increase -- an important test of investor appetite for Italian banks as many of them prepare to raise billions of euros to shore up their finances.
Top investment bank Mediobanca leads a consortium of banks coordinating the cash call, and its mandate expires on October. 31.
Bonomi, who earlier this month announced he had bought 2.67 percent of the bank, has said he is prepared to invest up to 150 million euros in the operation.
He was challenged by Arpe, known for helping turn around Rome-based bank Capitalia before it was bought by UniCredit
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