Reuters: Financial Services and Real Estate: UPDATE 2-Unipol throws ball back to Fondiaria on merger

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UPDATE 2-Unipol throws ball back to Fondiaria on merger Jun 6th 2012, 20:36 Wed Jun 6, 2012 4:36pm EDT * Unipol ready to accept 61 pct of new merged entity * Clauses favouring Fondiaria owner need to be removed * Unipol wants reply to proposal by June 11 * Fondiaria boards on alert for Friday, Saturday -source (Adds background on deal, details on possible board meetings) MILAN, June 6 (Reuters) - Italian insurer Unipol agreed on Wednesday to take a lower stake in a new company that will be created from its takeover of Fondiaria-SAI if its troubled peer agrees to remove clauses perceived as favorable to the family that controls the Fondiaria group. The offer, which still needs the approval of Fondiaria, would pave the way for the creation of what will be Italy's No. 2 insurer behind Assicurazioni Generali Bologna-based Unipol agreed in January to a complex deal brokered by top investment house Mediobanca to rescue loss-making Fondiaria, involving a series of capital increases. But the plan - which would see Unipol merging with Fondiaria, its debt-laden parent Premafin and its unit Milano Assicurazioni - came under regulatory scrutiny after hitting several snags. Bickering between Unipol and the Ligresti family, who control Fondiaria through Premafin, raised concerns that insurance regulator ISVAP could end up placing Fondiaria under special administration if its capital was not quickly shored up. In a statement on Wednesday, Unipol said it had accepted a Fondiaria proposal for it to take a 61 percent stake in the new merged entity instead of the 66.7 percent stake it had previously sought. But Unipol said its approval was subject to Fondiaria agreeing to remove clauses that grant former managers of Fondiaria exemption from legal proceedings and that would give the Ligrestis a right of withdrawal from Premafin. Italian market regulator Consob had previously called for these clauses to be removed as a condition for granting approval to the deal. Fondiaria, which has a market capitalisation of 416 million euros ($519.92 million) compared with 5 billion euros five years ago, has been run into the ground by years of management under the Ligresti family whose patriarch, Salvatore, is currently under investigation for alleged market manipulation. Some shareholders, angered at the wages the Ligrestis paid themselves, are incensed that a withdrawal clause would allow the family to exit with cash. Unipol said it wanted an answer to its latest proposal from the Fondiaria group by June 11. A source told Reuters earlier on Wednesday that board members at the Fondiaria groups had been notified that board meetings might be held on Friday or Saturday. Premafin is holding a shareholders' meeting on June 12 to approve a 400 million-euro cash call that will allow Unipol to take control of the holding and creditor banks to press ahead with debt restructuring. ($1 = 0.8001 euros) (Reporting by Gianluca Semeraro, Stephen Jewkes and Andrea Mandala; Editing by David Holmes and Matthew Lewis) Link this Share this Digg this Email Reprints

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