Reuters: Private Equity: UPDATE 1-Italy funds present new Fondiaria offer

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UPDATE 1-Italy funds present new Fondiaria offer May 9th 2012, 21:13 Wed May 9, 2012 5:13pm EDT * Funds propose 800 mln euro cash call at Fondiaria * Their part of capital hike to be priced 1.5-2.5 euros * Conditional on public tender offer being waived (Adds detail) MILAN, May 9 (Reuters) - Two Italian private equity funds said on Wednesday they will invest a total of at least 300 million to 400 million euros to take control of troubled insurer Fondiaria-SAI as they rejigged a rival bid to one tabled by peer Unipol to save Fondiaria. In a statement on Wednesday, Sator and Palladio Finanziaria said they had proposed an overall capital increase at Fondiaria worth no less than 800 million euros ($1.03 billion) to help plug a capital shortfall at the insurer. The offer replaces a previous bid, which expired on April 30, and which had been premised on a capital increase of 850 million euros at Fondiaria's parent company Premafin. In January, investment house Mediobanca brokered a complex deal that would see insurer Unipol save Fondiaria in a four-way merger with three capital increases. Fondiaria, which last year posted a loss of over 1 billion euros, has said it wants to proceed with the Unipol merger, although it has asked for some conditions to be reviewed. In the statement on Wednesday, the two funds said they will price their part of the cash call at between 1.5 euros and 2.5 euros per share. Fondiaria shares closed on Wednesday at 0.85 euros. They said they had received expressions of interest to underwrite the portion of the capital increase reserved for Fondiaria shareholders of no less than 400 million euros. The offer is conditional on the market regulator waiving the need for a public tender offer on Fondiaria and its unit Milano Assicurazioni. In the last five years, Fondiaria, Italy's biggest car insurer, has seen its market value shrink to 396 million euros from over 5 billion euros. At the end of last year its solvency ratio - a measure of capital strength - fell below the regulatory minimum. ($1 = 0.7733 euros) (Reporting By Stephen Jewkes; editing by Andre Grenon) Link this Share this Digg this Email Reprints

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