Mediobanca shareholders should back Banca Generali bid, ISS says

MILAN (Reuters) -Leading governance adviser Institutional Shareholder Services (ISS) said on Friday it was keeping a recommendation for shareholders in Italy's Mediobanca to vote in favour of a plan to acquire private bank Banca Generali.

Mediobanca shareholders have been called to vote on the deal on August 21, after the Milanese bank scrapped at the last minute an earlier vote it had convened for June 16.

Mediobanca is bidding for Banca Generali as it fights off a hostile takeover offer by Monte dei Paschi di Siena.

Mediobanca CEO Alberto Nagel has pitched the Banca Generali deal to investors as an alternative project to Monte dei Paschi's. The Tuscan bank says there is no reason to see them as mutually exclusive.

Nagel has run into conflict with two leading Mediobanca investors who have now become key shareholders in Monte dei Paschi, and risked losing the June 16 vote.

"Despite the remaining uncertainties surrounding the bid and the Banca Generali operation, the proposed resolution continues to warrant a vote FOR as the deal is supported by a sound rationale," ISS said in its report.

"Although the proposal is submitted against the backdrop of Banca Monte dei Paschi di Siena's hostile exchange offer, there continue to be no concerns at this point that supporting Mediobanca's bid for Banca Generali would block an attractive or superior deal for Mediobanca," it added.

(Reporting by Laura Contemori and Valentina Za; Editing by Alvise Armellini and Helen Popper)