Toro, the insurance division of Italy’s Fiat, has withdrawn its offer to acquire a 22 percent stake in Fondiaria, the Italian insurance group which has been the subject of a takeover battle between Toro and another insurer, SAI.
The move clears the way for a group led by U.S. Investment bank J.P. Morgan Chase to acquire the shares from their current holder Montedison (See IJ Website Feb. 6 and 4). SAI had originally agreed to purchase the shares at a premium, but was prevented from doing so by Italian financial authorities.
Control of Fondiaria, however, remains very much in limbo, as SAI has claimed to have a call option on the Morgan shares, while institutional investors have challenged the whole transaction, claiming that Morgan’s purchase should be subject to the same rules as SAI’s, namely that it should pay all shareholders the same 52 percent premium over market value.
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