Shareholders Fail to Back De Benedetti

Italian financier Carlo de Benedetti failed Thursday to win shareholder support in his takeover battle for the massive holding company Societe Generale de Belgique SA.

More than 12 hours after a special meeting began in a tent next to the company’s headquarters, a final count showed De Benedetti and his allies were unable to gain three seats on the company’s board of directors.

The long-awaited tally, further delayed by computer problems, showed that the De Benedetti faction garnered only about 44.5% of the votes in a special election, short of the 51% necessary to win seats.

But a slate of 12 candidates endorsed by Societe Generale did win a majority, further bolstering the company’s ability to remain a Belgian enterprise.

More than 1,150 shareholders who control 75% of Belgium’s largest holding company attended the meeting, which began under tight security shortly after 10 a.m. local time.

Board to Be Expanded

De Benedetti, who sparked the heated takeover battle for Societe Generale three months ago, topped a list of 15 candidates seeking board seats. He hoped to be elected along with two allies, including Andre Leysen, chairman of Belgium’s Gevaert NV.

Societe Generale nominated the remaining candidates, most of whom were allied with France’s Cie. Financiere de Suez and Groupe AG, Belgium’s largest insurer. The two companies have led the fight against De Benedetti.

Societe Generale’s current 11 directors will remain, and the board will be expanded to include the 12 new members endorsed at the meeting. There is no maximum number of directors that can serve on the company’s board.

Among the new directors are six members of the Suez group and Groupe AG Chairman Maurice Lippens.

The vote also was expected to serve as an indication of how many shares each faction controls. Under Belgian law, shareholders are not required to disclose the amount of their holdings, leaving only speculation as to which group is in the majority.

De Benedetti, who spent about $1.7 billion to increase his Societe Generale holdings, claims that he and his allies control 48% of the company.

But Suez and Groupe AG have said they hold 50.7%, after spending about $850 million to beef up their stake.

Wants Controlling Role

Yet even with a minority interest De Benedetti can hamper the decision-making process.

“Without me . . . no stable management of Societe Generale is possible,” he said at the meeting, which he requested.

An 11th-hour attempt to reach an accord between the rival factions failed Wednesday night.

Lippens of Groupe AG indicated that De Benedetti refused an offer to have a significant voice in a new management group. “We deeply regret an important shareholder has refused to take a place at the table,” he said.

Rather than be a team player, De Benedetti wants to run Societe Generale’s day-to-day operations and vowed to continue to seek control of the giant company.