UPDATE: Unipol, Fondiaria-SAI Take Step Closer To Merger
March 19 2012 - 2:00PM
Dow Jones News
Italy's Unipol Gruppo Finanziaria SpA (UNI.MI) Monday won
shareholder approval to raise EUR1.1 billion to fund its proposed
takeover of Fondiaria-SAI SpA (FSA.MI) in a complex operation to
create the country's biggest insurer after Assicurazioni Generali
SpA (G.MI).
"This project...is of extraordinary importance for Unipol [and]
for FonSai," Unipol Carlo Cimbri told shareholders at an
extraordinary meeting in this north-central city where they voted
in favor of the capital increase, according to MF-Dow Jones.
The combined group, which would include Fondiaria-SAI unit
Milano Assicurazioni SpA (MI.MI), would be second only to Generali
but still lead in the non-life insurance business, he said.
Its headquarters would be in Bologna, home to Unipol, he
added.
In the northwestern Italian city of Turin, meanwhile,
Fondiaria-SAI shareholders held an extraordinary meeting to approve
the insurer's own EUR1.1 billion capital increase to improve its
solvency ratio and prepare it for being taken over by Unipol,
MF-Dow Jones reported.
Italy's banking sector also witnessed a bout of consolidation
Monday, with Credito Valtellinese Scarl's (CVAL.MI) board approving
a plan to acquire smaller peer Credito Artigiano SpA (CRA.MI) in
which the bank already owns a 77.4% stake.
Unipol's proposed acquisition of Fondiaria-SAI is complex,
involving a series of capital increases.
Unipol would first take a controlling stake in Fondiaria-SAI's
parent, Premafin Finanziaria Holding di Partecipazioni SpA (PF.MI),
by taking part in a EUR400 million reserved capital increase by
Premafin.
This stake in Premafin would allow Unipol to take part in
Fondiaria-SAI's own capital increase, which in turn would allow
Unipol to take a controlling stake in Fondiaria-SAI.
Since Unipol would be doing it through Premafin, its
participation in the operation would be limited by Premafin's stake
in Fondiaria, which stands at 35.8%.
Unipol wants to avoid having to acquire 100% of Fondiaria-SAI
because of the cost, and it has asked for a waiver from market
regulator Consob. It has yet to get a reply.
The operation would mark the end of the Ligresti family's
presence in the insurance business in Italy. Saddled with hundreds
of millions of debt, the family is forced to relinquish control of
Premafin because it is unable to take part in Fondiaria's capital
increase, a necessary operation because its solvency ratio is below
the 100% minimum. The ratio indicates an insurer's ability to honor
claims.
"We don't foresee a role for the Ligresti family in the new
company," Cimbri said.
But Unipol faces a challenge by two investment companies that
are also interested in Fondiaria-SAI. Palladio Finanziaria SpA and
Sator Capital Ltd. have a combined 8% stake in Fondiaria-SAI and
have made their own offer to take over the insurer.
At Fondiaria-SAI's shareholder meeting, representatives of
Palladio and Sator abstained from voting on the proposal for a
capital increase.
Cimbri has tried to minimize the threat posed by the rival
offer. He has also sought to further his case by quantifying the
benefits of a deal, such as EUR335 million in cost savings.
In Milan, Premafin closed up 13.5% at EUR0.35, while
Fondiaria-SAI was up 1.9% at EUR1.29 and Unipol rose 3.1% to
EUR0.28.
"The market is waiting for the operation to go ahead," one
dealer said. "The project is fairly big and complex. But we now
have to wait to see how Sator/Palladio will react."
-By Alberto Chimenti, MF-Dow Jones; Gilles Castonguay, Dow Jones
Newswires; +39 348 596 5667; gilles.castonguay@dowjones.com;
@GRCastonguay
(Oscar Bodini of MF-Dow Jones in Turin and Marco Fusi of MF-Dow
Jones in Milan contributed to the article.)
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