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January 30, 2012 9:00 pm
Unipol Gruppo Finanziario plans to raise as much as €1.1bn ($1.4bn) in a rights issue as it seeks to instigate a four-way merger with rivals to become Italy’s second-largest insurance group by premiums.
The deal – involving the Italian insurers Unipol, Premafin Assicurazioni, Fondiaria-SAI and Milano Assicurazioni – goes to the core of debate about governance in Italy and the powerful cliques that control swaths of business through cross-shareholdings.
Italian market regulators have forced a revision of earlier drafts of the deal after a mooted takeover offer published earlier this month favoured the Ligresti family, a keystone of Milanese financial circles, over minority shareholders.
The Ligresti family, led by patriarch Salvatore Ligresti, is the majority owner of Premafin, a debt-laden holding company, which in turn controls Fondiaria-SAI and Milano Assicurazioni.
The earlier mooted deal would have seen the Ligresti family paid a chunky premium for their lossmaking business. Under the revised deal, Unipol will undertake a rights issue and then take control of Premafin, which in turn will undertake a €400m capital increase reserved for the Bologna-based insurer.
Following rights issues aimed at giving Unipol control of the Ligresti-owned groups, Premafin will then take part in a capital increase at Fondiaria-SAI expected to be worth about another €1.1bn, according to advisers. Lastly, Milano Assicurazioni will be absorbed into the Unipol-Premafin-Fondiaria group.
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