Italy's Sator, Palladio Relaunch Offer to Recapitalize Fondiaria-SAI
06/08/2012| 04:51am US/Eastern
ROME--Investment vehicles Sator Capital Ltd. and Palladio Finanziara Friday relaunched their offer to help recapitalize Fondiaria-SAI SpA (>> Fondiaria - SAI SpA), Italy's second-largest life insurer, raising the stakes in a controversial power struggle in Italian finance.
Sator and Palladio said in a statement that they had submitted a proposal to Fondiaria-SAI's board which would ultimately raise EUR800 million in fresh equity--50% more than the company's current market capitalization for the insurer, raising its regulatory solvency ratio and helping other investors and creditors recover value.
They said they wanted an answer within 10 days to their proposal, which clashes with a rival offer made by Unipol Gruppo Finanziario SpA (>> UNIPOL) to merge with Fondiaria-SAI in a deal backed by Mediobanca SpA (>> Mediobanca Group) and UniCredit SpA (>> UniCredit SpA), creditors of the insurer, and Premafin Finanziaria SpA (>> Premafin Finanziaria SpA), the insurer's controlling shareholder.
Their offer prompted a jump in Fondiaria-SAI's share price. At 0804 GMT shares were up 3.6% at EUR1.03.
Sator and Palladio, which together own 8% of Fondiaria-SAI compared with UniCredit's 7% stake--said that Premafin investors might, over the medium term, benefit from an increase in the value of their Fondiaria-SAI shares, allowing the holding to pay back its debts.
Premafin could own between 14% and 25% of Fondiaria-SAI after the operation--down from its current 36% stake --depending on whether it participated in the capital increase, the two Italian investment vehicles said.
Fondiaria-SAI's other shareholders would suffer a smaller dilution than in the rival Unipol offer, they claimed.
Separately, members of the Ligresti family that control Premafin acknowledged that there were "critical points" in Unipol's offer that had yet to be clarified or resolved.
Premafin shares were largely stable, as were those of Unipol. Milan's FTSE-Mib index is down 2.3%, while shares in Italy's largest insurer Assicurazioni Generali SpA (>> Assicurazioni Generali SpA) are down 3%.
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