Italian private equity houses Sator and Palladio finally retreated from insurer Fondiaria-Sai, relinquishing the troubled behemoth to the hands of the 'salotto buono', the figurative drawing room in which the nation’s elite of industrial, financial and political figures meet to broker deals.
Italian private equity houses Sator and Palladio finally retreated from insurer Fondiaria-Sai, relinquishing the troubled behemoth to the hands of the ‘salotto buono’, the figurative drawing room in which the nation’s elite of industrial, financial and political figures meet to broker deals.
Over the course of several months, the private equity duo offered to inject up to €800m into Fonsai, in a bidding war that filled column after column of the national press and has since sparked fierce debate surrounding the power brokers of Italian industry.
The final bid made by the private equity players, which jointly owned 8% of Fonsai, was rejected in late July in favour of a four-way merger with other insurance firms. In early August, the national courts denied their appeal against the merger.
The merger sees insurance giant Unipol take a controlling stake in Fonsai parent company Premafin through a reserved capital increase, which will trickle down to Fonsai. The final stage sees the merger of Unipol, Fondiaria-Sai and Premafin with Milano Assicurazioni, a subsidiary of Fonsai, to create what the Italian press has dubbed ‘Grande Unipol’.
But the plot thickened recently, as Alberto Nagel, chief executive of Milanese investment bank Mediobanca, was brought in for questioning by prosecutors following allegations of obstructing the work of regulators.
Mediobanca, owed €1.1bn by Fonsai in subordinated debt, had fully supported the four-way merger, brokering the deal. Protecting the interests of minority shareholders, the Italian stock market regulator Consob agreed to the merger on condition that the Ligresti family, the majority shareholder in Fonsai, did not gain a single euro from the deal.
But prosecutors suggest a letter bearing Nagel’s initials grants Ligresti a payout of around €45m and a litany of other benefits. To cash in, Ligresti was asked not to speak against the marriage of the Premafin-Fonsai group to Unipol, and forever hold his peace.
Nagel claims his initials feature on a photocopied document and symbolise acknowledgment of the original letter, as requested by the Ligresti family, and not the endorsement of a binding agreement.