Power to (some of) the people

6 March 2012 By George Hay Follow @gfhay

The struggling Italian insurer’s investors have to choose between merging with rival Unipol and a private equity offer led by ex-Capitalia chief Matteo Arpe. Both carry risks. But the benefits of the Unipol deal in particular look skewed to power-brokers rather than shareholders.

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The terms of a four-way merger to rescue troubled Italian insurer Fondiaria-SAI could be discussed at a board meeting on March 15, Reuters reported on March 5.
The board could discuss the ranges for the share swap ratio in the planned merger between Fondiaria, its Milano Assicurazioni unit, its parent Premafin and rival insurer Unipol, according to a source close to Fondiaria.
The board of Premafin, which holds a 36 percent stake in Fondiaria-SAI, said on March 1 it was unable to make a decision on a bid by two private equity groups, Palladio Finanziaria and Sator, the group founded by Italian banker Matteo Arpe.
Premafin, which is controlled by the Ligresti construction and property dynasty, said the exclusive nature of the Unipol offer meant it could not talk to Palladio Finanziaria and Sator.
The two funds have acquired 8 percent of Fondiaria. Premafin said the position of its creditor banks made it impossible to make any decision on the offer.
Unipol announced on Jan. 29 that it had agreed to draw up an integration plan with Premafin. Sator Capital and Palladio Finanziaria announced their rival proposal on Feb. 22.
Mario Monti, the Italian prime minister, discussed the Salotto Buono in a speech at the Milan stock exchange on Feb. 20. Monti said the Salotto Buono had often preserved the status quo and subsidised the survival of “Italianness” in certain companies. This had not always been in the long-term interest of the country or the companies, he said.

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