Liverpool Limited Partnership, a Bermuda-based mutual fund, which owns about one percent of the shares of Italy’s Fondiaria, has asserted that JP Morgan Chase, which just agreed to acquire a 22 percent stake in the company, (See IJ Website Feb.4) must make a full takeover offer for all of its outstanding shares at the same price of the shares it acquired.
If Italian financial authorities agree, Morgan could end up paying €3.7 billion ($3.22 billion) for a company with a present market value of around €2.3 billion ($2 billion). The claim, and the estimates are based on Morgan’s position as a successor to Italy’s SAI, which had agreed to purchase a 29 percent stake in Fondiaria before the regulators ruled that it had to make an offer for all of the shares.
Morgan agreed to acquire its 22 percent interest at the same price as SAI had agreed to pay their owner, Montedison, which represented a 56 percent premium over the market value of the shares. Liverpool claims that Morgan is essentially acting as part of the original deal SAI made, and should therefore come under the same ruling.
To further muddy the waters, SAI issued a statement asserting that it holds a “call option” on the shares acquired by Morgan and two other investors, which it can exercise during the next two years, or can transfer to another entity.
To say the least, the situation remains unclear.
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