MILAN, April 28 Italian insurer Unipol
and its advisor Mediobanca will defend their plan to
create Italy's second largest insurance group to antitrust
regulators on Monday, the same day a rival bidder is expected to
announce its next move.
Fondiaria-SAI and its controlling company Premafin
have been ordered by regulators to recapitalise after
Fondiaria's solvency ratio - a key measure of financial strength
- fell to an alarming 78 percent at the end of 2011.
Powerful investment bank Mediobanca, which is also a
creditor, has put together a rescue plan involving a four-way
merger with smaller rival Unipol, which would involve
three capital hikes.
Unipol's bid for Fondiaria was put on hold on Thursday,
however, when the antitrust agency suspended the merger for 45
days in order to investigate potential risks to competition from
the tie-up, which would create Italy's No. 2 insurer after
The antitrust decision is a setback for Mediobanca, which
faces the prospect of large writedowns on its loans to Fondiaria
if the insurer is forced into insolvency because the four-way
merger falls through.
Much depends on whether Unipol Chief Executive Carlo Cimbri
has the negotiating skills to convince antitrust officials that
the merged insurer can take steps necessary to guarantee
competition, and on whether the agency imposes conditions that
Unipol would find too onerous.
Cimbri will meet with antitrust officials next week, Italian
papers reported on Saturday.
On Monday, Fondiaria will meet with insurance regulator
ISVAP to seek a delay to its pending capital increase, ordered
by the regulator, until after the antitrust ruling, expected by
Also on Monday, private equity funds Sator and Palladio
Finanziaria, could announce whether they intend to extend beyond
an April 30 deadline their bid for Premafin, walk away, or
Two sources familiar with the situation said on Saturday the
consortium led by former Capitalia boss Matteo Arpe could unveil
a new deal. "I can't imagine they'll just walk away after all
they've done so far," a third source said.
The funds have argued that all Fondiaria needs is a capital
increase to restore its battered solvency ratio.
Three foreign banks, including JP Morgan, would be
ready to guarantee a 400-500 million euro cash call on the
market to support a stand-alone capital increase for Fondiaria,
La Repubblica said on Saturday, without citing sources.
Meanwhile, also complicating the picture, Fondiaria is at
the centre of a widening bankrupcy investigation involving
Salvatore Ligresti, the patriarch of the family that controls
Fondiaria parent Premafin.
Sources close to the probe said magistrates have put
Ligresti under investigation for alleged market rigging, while
requesting that two holding companies of the Ligresti family be
Should the two be declared insolvent, they could be ordered
by the court to restructure their debt.
On Friday, two executives from the holdings, Sinergia and
Imco, were placed under investigation by Milan prosecutors,
legal sources told Reuters.
A hearing to rule on the bankruptcy is set for May 2.