Mediobanca’s attempt to buy Banca Generali has collapsed after shareholders withheld the support needed to approve the deal, undermining the merchant bank’s strategy to fend off a hostile takeover by Monte dei Paschi di Siena.

At an extraordinary meeting in Milan on Thursday investors controlling 78 per cent of Mediobanca’s share capital cast their votes. Only 35 per cent backed the all-share offer for Banca Generali, well short of the majority of outstanding shares required. Around 32 per cent abstained and 10 per cent voted against, according to filings reported by The Banker.

The decisive opposition came from the billionaire Del Vecchio and Caltagirone families, who together hold almost 30 per cent of Mediobanca and support Monte dei Paschi’s €17 billion offer for the bank. Both families also own stakes in insurer Generali, parent of Banca Generali.

Alberto Nagel, Mediobanca’s long-serving chief executive officer, had argued that acquiring the private-bank unit of Generali for €6.8 billion would lift Mediobanca’s valuation and create Italy’s second-largest wealth manager, making the group a less attractive target.

After the ballot he called the rejection “an opportunity, for now, missed for the development of our bank and the Italian financial system” and blamed “shareholders who also expressed a clear conflict of interest” for the outcome

A person close to Delfin, the Del Vecchio holding company, countered that the vote reflected “concerns about the unusual methods and timing of the transaction rather than its strategic rationale”, Reuters reported. Representatives for the Caltagirone group declined to comment.

Failure to secure Banca Generali leaves Nagel with dwindling options to remain independent. Monte dei Paschi’s cash-and-shares tender runs until 8 September and needs at least 35 per cent of Mediobanca stock to be tendered, a threshold that could be met with the support of the two family investors. The Italian government backs the combination, seeing it as a means to build a stronger competitor to Intesa Sanpaolo and UniCredit.

Analysts said the vote underscores the intricate web of cross-shareholdings shaping Italian finance and signals that further consolidation is likely. Shares in Mediobanca slipped 0.5 per cent after the decision, while Banca Generali fell almost three per cent, Bloomberg reported.

Nagel, who has run Mediobanca since 2008, must now decide whether to negotiate with Monte dei Paschi or seek alternative transactions. “The bigger battle will only be decided in September,” Bloomberg quoted him as saying earlier this month when outlining his defence.

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