Fund Sets Clash With Italy Over Meloni Appointments at Enel
(Bloomberg) -- A UK fund has presented an alternative list for the board at state-controlled Enel SpA, just days after Italian Prime Minister Giorgia Meloni’s government nominated Flavio Cattaneo to be the utility’s new chief executive officer.
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London-based Covalis Capital said in a statement Monday that it’s seeking to change the company’s board appointment process, saying that the state’s moves around the company have led the shares to trade at a discount to peers.
The fund, which says it controls approximately 1% of Enel’s share capital, has proposed an “alternative slate of independent directors” for the firm’s board, including candidates that better reflect its global presence in Italy, Spain and the US. Its list includes Marco Mazzucchelli, currently a board member at Quintet Private Bank Europe SA.
Enel shares slumped last week after Meloni’s surprise nomination of Cattaneo — seen as a political compromise — to replace long-serving CEO Francesco Starace. Industry veteran Paolo Scaroni was named chairman.
Scaroni is a former CEO at Eni SpA, where he worked to deepen ties with Russia’s Gazprom. An ally of ex-Premier Silvio Berlusconi, he’s currently chairman of soccer club AC Milan.
The government last week made a series of nominations for state-controlled firms, as it seeks greater sway over key portions of the economy. All nominees have to be confirmed by shareholders at annual general meetings in the coming weeks. Italy’s finance ministry is Enel’s biggest shareholder, holding about 24% of the company’s shares.
“Due to the opaque process, we do not know what the government’s proposed slate stands for or what their plan is for Enel,” Covalis founder Zach Mecelis said in the statement, adding that the appointment system “undermines investor confidence, erodes value and is out of line with international standards.”
Enel shares rose as much as 0.8% in early trading in Milan on Monday, and were up 0.5% at 10:11 a.m. local time.
--With assistance from Antonio Vanuzzo.
(Updates with candidate, Scaroni, Covalis quote in sixth paragraph, shares in last.)
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