MILAN (Reuters) – Eyewear tycoon Leonardo Del Vecchio, who owns 1.9% of UniCredit, opposes the lender taking over rival Monte dei Paschi and is in touch with other large Italian investors who share concerns about a potential deal, two people close to the matter said.

Rome is trying to reduce its 64% stake in Monte dei Paschi (MPS), after spending 5.4 billion euros in a 2017 bailout of the world’s oldest bank. MPS now needs up to another 2.5 billion euros ($3 billion) to bolster its finances.

Italy sees UniCredit as the ideal partner for MPS, sources have said. But the Milanese bank is looking for a new boss after CEO Jean Pierre Mustier said he would step down by April after clashing with the bank’s board over strategy.

Mustier, who shunned mergers and acquisitions in favour of returning cash to investors, had set tough conditions for consideration of a potential MPS acquisition, sources have said.

The choice of a new CEO will have implications for any potential MPS deal.

Daily Il Sole 24 Ore reported on Thursday Del Vecchio had held meetings with two other major Italian shareholders in UniCredit, Fondazione CariVerona and Fondazione CRT.

These three, which have a combined UniCredit shareholding of 5.36%, are looking to form a pact to have a greater say in the choice of a new CEO and stave off a potential Monte dei Paschi deal, the paper said.

UniCredit, Del Vecchio’s holding company Delfin, and the two foundations declined to comment on the report.

One of the sources confirmed that the three UniCredit shareholders had held talks and said they shared concerns over an acquisition of loss-making Monte dei Paschi, adding that it was too soon to speak of a shareholder pact.

The person said one way to steer UniCredit away from a potential Monte dei Paschi deal would be to back an alternative merger.

UniCredit had held preliminary merger talks with Banco BPM last year that came to nothing.

Rome is working on plans to make an MPS takeover more palatable to UniCredit and its shareholders. Two people familiar with the matter told Reuters on Tuesday Italy could take on about 14 billion euros in impaired loans from UniCredit via state-backed loan manager AMCO.

One of the sources said some UniCredit investors, while sceptical about a Monte dei Paschi deal, could be willing to evaluate the conditions put forward by Rome to facilitate a sale.

UniCredit is expected to pick a new CEO in February while a shortlist of candidates may emerge when the bank’s nomination committee is due to meet on Jan. 14, two people familiar with the matter have said.

($1 = 0.8160 euros)

(Reporting by Claudia Cristoferi, Gianluca Semeraro, Andrea Mandala and Valentina Za. Editing by Jane Merriman)

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