Bloomberg News

Unipol Deal May Be at Risk After Ligrestis Refuse Condition

June 08, 2012

Jonella and Paolo Ligresti, members of the family that controls insurer Fondiaria-SAI SpA (FSA), refused to agree to conditions set by Italy’s securities market regulator for Unipol Gruppo Finanziario SpA (UNI)’s proposed merger, a move that could jeopardize the deal.

Jonella and Paolo Ligresti refused to revoke an exemption from eventual legal action granted to them by Unipol in January, they said in a stock-exchange statement today. Italian regulator Consob said last month that the exemption must be eliminated in order to avoid a mandatory bid for minorities. The Ligresti siblings also said they want time to review alternative offers to Unipol’s proposed merger transaction.

Sator Capital Limited, led by Matteo Arpe, and Palladio Finanziaria SpA today formally presented an offer to provide 400 million euros ($500 million) of capital to Fondiaria as part of an alternative to rescue unprofitable Fondiaria.

“This Ligresti statement can be read as a move to open to Sator and Palladio’s offer,” Fidentiis Equities said in a research note today. “If a bid on minorities becomes mandatory we expect Unipol to revoke the offer, paving the way for Sator and Palladio.”

Shares Up

Fondiaria, based in Turin, climbed as much as 14 percent, the most since May 11, and was up 13 percent to 1.13 euros at 2:30 p.m. in Milan trading. That gives the insurer a market value of about 485 million euros. Premafin rose 8.4 percent to 23.04 cents, while Unipol rose 3 percent to 19.6 euros.

Fondiaria will discuss on June 11 the offer it received from funds Sator and Palladio as well as the consequences of the decision by the two Ligresti family members, it said in a separate stock-exchange statement.

Arpe’s fund and its partner Palladio, an Italian investment firm, today proposed rescuing Fondiaria through an 800 million- euro capital increase, half of which would be funded by them. Sator and Palladio raised the lower end of the price range, offering 2 euros per share to 2.5 euros per share for their part of the capital plan, compared with a previous range of 1.5 euros to 2.5 euros announced in May. The rest of the capital would come from a sale of stock to existing shareholders at a 50 percent discount, Sator and Palladio said in a statement.

Their offer competes with one made by Unipol, which is proposing a four-way merger involving Fondiaria’s biggest investor, Premafin Finanziaria SpA (PF), and Fondiaria’s unit Milano Assicurazioni SpA. (MI)

A Unipol spokesman declined to comment.

To contact the reporters on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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