Premafin Finanziaria SpA, the biggest investor in Italy’s No. 2 insurer, climbed the most in at least 17 years after Matteo Arpe’s private-equity fund Sator Capital Limited and Palladio Finanziaria SpA offered to buy a controlling stake.
Premafin advanced as much as 45 percent to 39.9 cents in Milan, its biggest gain since January 1995, and was up 37 percent to 38 cents at 3:23 p.m., giving the company a market value of 156 million euros ($207 million).
Sator and Palladio, an Italian investment firm, offered to invest as much as 450 million euros in Premafin through a capital increase, with a target of reaching at least 60 percent, according to a statement late yesterday. The binding offer expires March 8.
The offer is conditional on Premafin shareholders rejecting a proposed merger with Unipol Gruppo Finanziario SpA, Italy’s third-largest insurer, and on Premafin’s banks agreeing to restructure the company’s debt. Premafin controls insurers Fondiaria-SAI SpA and Milano Assicurazioni SpA.
Sator and Palladio said their offer was better than Unipol’s because it excludes a merger between Fondiaria and Premafin and is fairer for minority shareholders.
Unipol, Italy’s No. 3 insurer, agreed last month to buy new shares in Premafin to allow it to participate in a 1.1 billion-euro share sale announced by Fondiaria on Jan. 30. The plan was supported by UniCredit SpA and Mediobanca SpA, two of Fondiaria’s biggest creditors.
After the recapitalization, Unipol, Premafin, Fondiaria and its Milano Assicurazioni SpA unit planned to merge.
UniCredit Chief Executive Officer Federico Ghizzoni said the bank will continue to support Unipol’s merger plan with Premafin. “Unipol’s proposal is the only one we have analyzed,” he told reporters in Milan today.
The Sator-Palladio bid is also conditional on obtaining an exemption from regulators on the requirement to make a bid for both Fondiaria and the rest of Premafin. Sator and Palladio already own a combined 8 percent stake in Fondiaria.
“The proposed plan, despite appearing less risky than Unipol’s for Fondiaria and Milano Assicurazioni minority shareholders, is less financially robust overall given the limited capacity of the proponents,” Gianantonio Villani, an analyst at Kepler Capital Markets, wrote in a note today.
Fondiaria fell as much as 5.4 percent and was down 4.7 percent to 1.62 euros, giving it a market value of 675 million euros.
“The Sator-Palladio offer may remove the speculative appeal for Fondiaria and Milano Assicurazioni,” Alberto Villa, an analyst at Intermonte SIM SpA, wrote in a note.