Reuters: Private Equity: UPDATE 2-Premafin gets more time for Fondiaria merger talks

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UPDATE 2-Premafin gets more time for Fondiaria merger talks May 21st 2012, 21:06 Mon May 21, 2012 5:06pm EDT * Premafin postpones shareholder meeting to June 12 * Fondiaria shareholders to meet on cash call end-June (Adds Fondiaria, Milano Assicurazioni statements) By Silvia Aloisi and Gianluca Semeraro MILAN, May 21 (Reuters) - Italian holding company Premafin has postponed a shareholder meeting originally scheduled for Monday to allow more time for its troubled Fondiaria-SAI unit to agree terms of a merger with rival insurer Unipol. The meeting, rescheduled for June 12, had been called to approve a Premafin capital increase reserved for Unipol as part of a rescue plan for struggling insurance group Fondiaria. Bologna-based Unipol agreed in January to a complex deal brokered by top investment bank Mediobanca to rescue loss-making Fondiaria in a four-way merger involving Fondiaria parent Premafin and its unit Milano Assicurazioni. But Premafin, Unipol and Fondiaria are having trouble reaching an agreement on merger terms. Fondiaria on Friday proposed giving Unipol a 61 percent stake in the new merged company. Unipol had previously said it wanted some 67 percent of the new insurance group.. Premafin itself said the merger plan put forward by Fondiaria would give Premafin 0.85 percent in the combined entity, less than it hoped for. Premafin is seeking a stake of between 0.98 percent and 1.66 percent in the combined company. Milano Assicurazioni backed the negotiations on Monday, welcoming as "fair" a proposal by major shareholder Fondiaria to give it a minimum stake of 10.7 percent in the new merged entity. Italian private equity funds Palladio Finanziaria and Sator, which own a combined 8 percent of Fondiaria, have made a rival bid to take over the insurer. Following a request from the two funds, Fondiaria called on Monday a new shareholder meeting by the end of June to vote a cash call of up to 1.1 billion euros ($1.40 billion) already approved in March. Fondiaria said last week it would continue to look into the rival offer from the funds, but it also said the offer would be dropped if its share swap ratio plans for the Unipol deal were accepted. The postponement of the Premafin shareholder meeting also gives the companies a chance to respond to a ruling expected this week from Italy's stock market regulator Consob on whether Unipol will have to make a bid for Milano Assicurazioni, which is controlled by Premafin, as part of the merger plan. ($1 = 0.7832 euros) (Additional reporting by Paola Arosio, Jennifer Clark, Antonella Ciancio; Editing by Jane Merriman and Phil Berlowitz) Link this Share this Digg this Email Reprints

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