MILAN, June 8 (Reuters) - The proposed candidate to replace entrepreneur Francesco Gaetano Caltagirone on the board of Italy's Generali GASI.MI has turned down the position, the insurer said in a statement late on Tuesday, the latest twist in a governance battle.
Caltagirone, Generali's second-largest shareholder, quit the board last month, opening a new chapter in a long-standing shareholder row.
The appointments committee then proposed to co-opt Roberta Neri, the next unelected candidate on the slate presented by Caltagirone for a board renewal in April.
At the April shareholder vote, Caltagirone had challenged a decision by Generali's board to give a third term to Chief Executive Philippe Donnet. His bid to appoint his own CEO candidate was defeated but he did secure three board seats.
The board has now instructed the appointments and corporate governance committee to propose a new candidate, Generali said in its statement. It did not say why Neri rejected the role.
A source familiar with the situation said Neri wanted all the board members to back her as a condition for accepting the role.
After Neri's decision, the next two names on the Caltagirone slate would be Claudio Costamagna and Luciano Cirina, its defeated candidates for the roles of chairman and CEO in the shareholder vote.
Former Telecom Italia CEO Flavio Cattaneo and academic Marina Brogi are the other board members from the Caltagirone slate.
Caltagirone, Cattaneo and Brogi had refused to join any of the board committees because they wanted the company to have a committee that gives a preliminary assessment on strategic transactions - a task which Generali proposed entrusting to the board in its entirety.
Generali said on Tuesday that the investment committee had been given a mandate to oversee merger and acquisition deals, alliances and partnerships with a value of at least 250 million euros ($267 million).
Brogi and Cattaneo have now agreed to join the board committees once a new member of Caltagirone's list gets appointed as a director, Generali said.
By 0720 GMT shares in Generali fell 1.3% underperforming a 0.1% drop in Italy's blue-chip index .FTMIB.
The Generali board is next due to meet on June 22. ($1 = 0.9356 euros)
(Reporting by Agnieszka Flak, Valentina Za and Gianluca Semeraro, editing by Giulia Segreti and Keith Weir)
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