Shares in Unicredito, one of the key players in the drama, rose sharply yesterday on talk that Deutsche may buy a significant stake in the bank.
Unicredito stunned Italian financiers earlier this year when it launched a $13bn merger bid for rival Banca Commerciale Italiana. The bid struck at the heart of Mediobanca's traditional power base and threatened to dramatically change the balance of power within Italian finance.
But Mediobanca, which has over the past fortnight staged a dramatic come- back after being all but written off, is understood to be seeking to turn the tables on Unicredito by forcing a block representing 38 per cent of the bank to be placed in friendly hands. Italian press reports say that a senior executive from Deutsche Bank met Mediobanca's chief executive Vincenzo Maranghi on Wednesday to discuss its role in the bid.
The latest move follows the success of Mediobanca in foiling any hopes of BCI agreeing to the Unicredito bid when it engineered the departure of BCI executives who favoured the Unicredito merger option.
The boardroom coup at BCI followed a similar coup a fortnight earlier at Generali, the insurance giant where chairman Antoine Bernheim, a senior partner at Lazards, the investment bank, was ousted, in revenge for its apparent treachery in supporting BCI's attempts to extricate itself from Mediobanca's control. Mediobanca had earlier pushed for an agreed merger between BCI and Banca Di Roma. But the talks broke down.
The conflict is particularly bitter because BCI and Generali were the main pillars of a constellation of financial institutions dominated by Mediobanca which held the purse strings for Italy's big industrial power brokers for most of the time since the Second World War.
Over the past few years,Mediobanca's dominance has been challenged by the incursions of the big Wall Street investment banks into its traditional fiefdoms and the fact that Italian corporations are increasingly able to raise finance abroad.