Reuters: Hot Stocks: UPDATE 1-Intesa shares down on talk of management clash, Monte Paschi rescue

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UPDATE 1-Intesa shares down on talk of management clash, Monte Paschi rescue Sep 26th 2013, 10:28 Thu Sep 26, 2013 6:28am EDT (Adds further details and background) By Paola Arosio MILAN, Sept 26 (Reuters) - Shares in Intesa Sanpaolo fell on Thursday on market talk of a management clash over whether Italy's biggest retail bank should help save smaller rival Monte dei Paschi di Siena, traders said. Three traders cited rumours that Intesa's chief executive Enrico Cucchiani and the octogenarian chairman of the supervisory board, Giovanni Bazoli, were fighting over the possibility of Intesa rescuing Monte dei Paschi - an option opposed by Cucchiani, a staunch free-marketeer. "It's the possibility of Cucchiani leaving (that is weighing on the shares), or more precisely the possibility that the tensions within the bank are linked to the idea of Intesa helping Monte dei Paschi," one trader said. Intesa declined to comment. Loss-making Monte dei Paschi, which is at the centre of a derivatives scandal, needs to find investors willing to join a 2.5 billion euro capital hike to avoid being nationalised. Intesa's shares had fallen 4.1 percent to 1.5980 euros by 0931 GMT, underperforming the FTSE MIB blue-chip index which was down 1.8 percent on resurfacing domestic political tensions. Other Italian banking stocks were also lower with the exception of Monte dei Paschi, whose shares were flat. Two people close to the bank on Thursday dismissed the idea of Intesa riding to the rescue of Monte dei Paschi - which took a 4.1 billion euro state bailout earlier this year. Cucchiani had, earlier this month, told Reuters he was not interested in increasing Intesa's exposure to the domestic banking system. A person who knows Cucchiani well said the manager is opposed to so-called systemic' deals, whereby a bank such as Intesa would ride to the rescue of struggling companies to keep them in Italian hands. Under the previous management led by Corrado Passera, Intesa had often taken part in such deals. SHOWDOWN? Several insiders have told Reuters that Cucchiani is clashing with Bazoli and a leading shareholder over his management style. Meetings of the bank's supervisory and management boards scheduled for next Tuesday could be decisive, one source said. "That there is a lot of unhappiness is a given. There are differences over strategy and management," said the source. "We can't pretend nothing is happening, Tuesday will be an important day." Cucchiani was appointed CEO of Intesa in November 2011 after Passera, the bank's long-standing chief executive, joined the government led by former Prime Minister Mario Monti. Intesa's shares have risen by more than 50 percent to 1.7 euros since his appointment was announced. Giuseppe Guzzetti, chairman of a powerful banking foundation that owns 5 percent of Intesa, on Tuesday denied a report that he and Bazoli were due to meet the governor of the Bank of Italy to discuss Cucchiani's ouster. (Additional reporting by Stefano Rebaudo and Valentina Za; Writing by Silvia Aloisi; Editing by Lisa Jucca and Pravin Char) Link this Share this Digg this Email Reprints

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