Experimental feature

Listen to this article

00:00
00:00
Experimental feature

Italian insurer Assicurazioni Generali has formalised its 3 per cent stake in potential predator Intesa Sanpaolo by buying €1.1bn worth of shares in the lender.

Generali took an interest in Intesa four weeks ago via a stock lending deal. The move came just after Intesa’s interest in Generali became public and effectively stopped Intesa from buying shares in the insurer without making a full bid.

On Friday, Generali said that it had cancelled the stock-lending deal and bought shares in Intesa instead, a decision that lessens the costs of the transaction. However, it has also hedged the economic risk associated with the shares via a derivatives deal.

Intesa is sounding out investors over the possibility of making a formal bid for Generali but would only consider a friendly deal. The insurer is sceptical about a deal with Intesa and is planning to beef up its cost-cutting programme to convince shareholders to back its independence.

Intesa shares closed down 1 per cent on Friday, and are now down by a tenth in the year to date.

Get alerts on Front page when a new story is published

Copyright The Financial Times Limited 2018. All rights reserved.

Comments have not been enabled for this article.

Follow the topics in this article