UPDATE 1-ISS recommends Mediobanca investors vote for outgoing board's candidates

(Adds details from ISS report and background)

MILAN, Oct 12 (Reuters) - Leading proxy adviser ISS recommended on Tuesday shareholders in Mediobanca vote for a slate of directors put forward by the outgoing board, in a sign of confidence in the Italian bank’s management.

Shareholders in Mediobanca will meet on Oct. 28 to appoint a new board. The choice between three rival slates of candidates comes at a time when changes in the Milanese bank’s shareholders have stoked uncertainty over its future strategy.

The slate put forward by Mediobanca outgoing board confirms Chief Executive Alberto Nagel as director for the next three years. A second list was filed by a group of investors and a third came from London-based activist fund Bluebell Capital Partners, which has criticised Mediobanca’s management.

“Support for the management’s slate would leave only two available seats, still allowing Bluebell to gain board representation, while restricting its influence on the board,” ISS said in its recommendations statement, seen by Reuters.

“This kind of representation would add two new independent directors that can contribute to the strategic debate without necessarily signalling an urgent need for a pivot in strategic direction,” it added.

Under Nagel, Mediobanca has moved away from its historic role as a financial holding company and boosted its wealth management and consumer credit operations through acquisitions. He came under fire from Leonardo Del Vecchio after the eyewear billionaire became Mediobanca’s top investor last year.

Del Vecchio later backed the CEO’s business plan.

The 85-year-old Luxottica founder, who owns a stake of 10.2%, last week said he would assess all three slates of candidates and make a decision in Mediobanca’s best interest.

A group of core shareholders in Mediobanca, with an aggregate 12.6% stake, have already thrown their weight behind Nagel ahead of the board renewal.

Citi analysts said investors “would be negatively surprised” if Del Vecchio were to support the Bluebell list.

Reporting by Claudia Cristoferi and Gianluca Semeraro, editing by Giulia Segreti and Pravin Char