FonSAI Oks Unipol Merger, But To Also Assess Sator-Palladio Offer

The board of Italian insurer Fondiaria-SAI SpA (FSA.MI) said late Monday it is prepared to carry on with initial plans to merge with Unipol Gruppo Finanziaria SpA (UNI.MI), together with FonSAI's parent company, Premafin Holding di Partecipazioni SpA (PF.MI), and its unit Milano Assicurazioni.

But the decision is based on the assumption that Unipol will as soon as possible clear the uncertainty over how it intends to overcome two clauses in the agreement, that some members of the Ligresti family---which controls FonSAI through Premafin--refuse to give up, FonSAI added.

Italian stock market regulator Consob had conditioned the exemption to launch a full takeover bid by Unipol on all of Premafin to the removal of these clauses.

Under the merger deal, Unipol will take a 61% stake in the merged business, FonSAI will get 27.45%, Milano Assicurazioni will hold 10.7%, while Premafin will have 0.85%.

In addition, FonSAI said its board has also agreed to assess an offer received last week by investment funds Sator Capital and Palladio Finanziaria and grant them access for due diligence at a date yet to be determined.

The two funds said Friday they had submitted a proposal to FonSAI's board that would ultimately raise EUR800 million in fresh equity--50% more than the company's current market capitalization for the insurer, raising its regulatory solvency ratio and helping other investors and creditors recover value.

Exchange website: www.borsaitaliana.it

-Write to Enza Tedesco at [e-mail]