Generali steps up investor returns as CEO offers to stay in charge

By Gianluca Semeraro

VENICE (Reuters) -Generali on Thursday pledged to return more than 8.5 billion euros ($8.9 billion) to shareholders through dividends and share buybacks through 2027, as CEO Philippe Donnet offered to stay on for another term despite expected opposition from some major shareholders.

Investors in Italy's biggest insurer have in the past clashed over its leadership, with Donnet backed by top shareholder Mediobanca but under attack by two billionaires - Francesco Gaetano Caltagirone and now deceased Ray-Ban magnate Leonardo Del Vecchio.

Donnet's mandate comes up for renewal in the spring and Generali said late on Wednesday its board would not put forward nominees after Italy's government changed corporate rules around succession that had been criticised by Caltagirone.

Further complicating the picture, Mediobanca has become a takeover target for state-backed Monte dei Paschi, after Caltagirone and Del Vecchio's investment vehicle Delfin became shareholders in MPS.

Generali has also earmarked 1.5 billion euros for mergers and acquisitions under its new multi-year strategy, after signing a memorandum of understanding with France's BPCE this month to set up an asset management joint venture that would have more than 1.9 trillion euros in assets.

The government has expressed reservations about the deal, saying domestic savings should be managed in Italy.

"The group will assess M&A opportunities with strict discipline, also benchmarking any potential transaction against share buybacks," it said.

Generali committed to growing earnings per share (EPS) by 8-10% a year on average over 2025-2027 with a net cash flow above 11 billion euros, it said in a statement, lifting its previous targets.

The insurer said buybacks would total at least 1.5 billion euros, including 500 million euros for 2025. ($1 = 0.9599 euros)

(Reporting by Gianluca Semeraro; Editing by Valentina Za, Kirsten Donovan)