UPDATE 2-Creval investors vote to keep CEO Lovaglio as CAI's buyout nears conclusion

(Adds details, Creval shares)

MILAN, April 19 (Reuters) - Italian bank Creval said its investors had appointed a new board on Monday, keeping CEO Luigi Lovaglio in the job and rejecting a proposal by Credit Agricole Italia (CAI) to delay the move pending the outcome of its takeover bid.

The buyout offer launched by the local arm of France’s Credit Agricole to expand in its biggest market outside France as Italy’s banking sector consolidates runs until Wednesday.

CAI had asked Creval shareholders to delay the appointment of a new board.

But the proposal was rejected at Monday’s general meeting where a slate of board nominees submitted by DGFD got 42% of votes, paving the way for Lovaglio’s reappointment, Creval said in a statement confirming what sources had told Reuters earlier.

DGFD is the vehicle of French businessman Denis Dumont which holds around 6% of Creval. Dumont had backed Lovaglio’s arrival at Creval to steer the bank towards a merger.

Creval has rejected CAI’s offer as too low. The new board meets later on Monday to discuss improved terms after CAI last week raised the price to 12.20 euros from 10.5 euros in a bid to encourage take-up.

CAI will further hike the price to 12.50 euros should shares corresponding to more than 90% of the bank’s capital be tendered, valuing Creval at 877 million euros.

Creval shares were flat at 12.20 euros at 1345 GMT

Credit Agricole is targeting 66.67% acceptance to ensure it controls extraordinary shareholder resolutions, so as to be able to absorb Creval and maximise projected savings.

However, it reserves the right to accept a take-up of 50% of Creval’s capital plus one share.

Additional reporting and writing by Valentina Za; editing by Louise Heavens, Kirsten Donovan