February 4, 2010 2:00 am
If there is one thing that keeps Japanese regulators awake at night, it is the fear of public censure. No wonder then that the financial regulator has asked telecoms group KDDI to reconsider its planned acquisition of a 37.8 per cent stake in Jupiter Telecommunications from Liberty Global.
KDDI is paying a 65 per cent premium to Jasdaq-listed JCom's share price to Liberty in a deal that has raised eyebrows among the investment community.
The spirit, if not the text, of Japanese takeover rules would require KDDI to launch a tender offer, giving minorities a chance to enjoy its largesse.
But KDDI argues the rules do not apply because it is buying holding companies that own the JCom shares, not the JCom shares themselves. Legally, this may let it off the hook. But for a regulator, eager to do the right thing, it would not look good to allow Liberty to walk away with a 65 per cent premium not on offer to Japanese investors.
Scarier yet is the memory of the huge stink over a regulatory loophole that allowed private equity firm Ripplewood to sell a chunk of Shinsei bank and make a mint, tax free. After all, that furore was led by the then opposition Democratic party, now in the seat of government.
The succession battle at Assicurazioni Generali is about to begin in earnest if the Italian rumour mill is anything to go by. And the result is by no means a foregone conclusion.
In recent years the Italian company has become the largest foreign insurer in China, market leader in central and eastern Europe, a big player in Latin America, not to mention one of western Europe's top three insurers. But it will be within the walls of Mediobanca, the Milan-based investment bank, that the future leadership of Generali will most likely be decided.
Tucked away behind the Scala opera house, Mediobanca is today a pale imitation of the all powerful institution that legendary banker Enrico Cuccia built up after the second world war. But it retains one last vestige of its former status in the shape of its 15 per cent stake in Trieste-based Generali.
These days the bank is presided over by Cesare Geronzi, one of Italy's most influential and controversial business figures. In the run-up to Generali's April shareholder meeting at which the entire board is up for renewal, his Mediobanca will momentarily resume its place in the limelight as the leadership of one of Italy's great names comes up for grabs.
Top of the list of those whose current mandates expire are Antoine Bernheim, the insurer's veteran French chairman and his two Italian joint chief executives Giovanni Perissinotto and Sergio Balbinot. The track record of this trio has been pretty good. But at 85, Mr Bernheim has become an easy target for critics who believe retirement should be dictated by age rather than capability. The dual chief executive structure is also considered anomalous by many.
While not officially a candidate to stay on as chairman, Mr Bernheim has not given up hope of a further year or so at the helm. He believes he has yet to complete his task of ensuring that Generali capitalises fully on its strong track record since he returned as chairman in 2002. And while persistent rumours suggest that Mr Geronzi is angling to move himself into the Generali chairman's seat, the game is far from over.
Mr Geronzi is doubtless mulling ways to extract maximum advantage from the widely expected changes in Trieste. But he may not have an entirely free hand. Easily overlooked is the key role that will be played by French financier Vincent Bolloré, an important Mediobanca shareholder and friend of Mr Bernheim.
Mr Bolloré is on good terms with Mr Geronzi, having helped ease him into the chairmanship at Mediobanca after his former bank, Capitalia, was taken over by Unicredit in 2007. But since Mr Bolloré also heads the significant foreign shareholder bloc at Mediobanca, Mr Geronzi knows he cannot ignore the well-connected Frenchman's views.
Generali, with all its wealth, prestige and potential influence within the Italian system is a tempting prize for Mr Geronzi. But Mr Bolloré probably also has the power to postpone a change of leadership in Trieste should he so wish. And while Mr Bernheim is the epitome of old school banking and would therefore never ask Mr Bolloré publicly for his support, the latter is so close to the Generali chairman that he is certainly aware of his wishes for an extra stint at the top - even if not the full three years of a regular mandate.
At the end of the day, the fate of the Frenchman currently at the helm of Generali could well be, quite ironically, in the hands of another Frenchman.
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