Italian insurer Cattolica has decided to postpone a proposed €200m capital increase to allow its shareholders to consider Generali’s buyout offer.
Its offer is conditional on the adjournment of a cash call, which Cattolica is required to make to complete a total €500m capital increase as mandated by regulators.
Generali helped Cattolica last year, by subscribing to an €300m reserved share capital increase, thereby picking a 24% stake in the company.
Warren Buffett’s Berkshire Hathaway is said to be the second-largest investor in Cattolica.
Cattolica wants to give its shareholders the option to sell out to Generali because the proposed capital increase would have rendered the offer ineffective.
In a statement, Cattolica said: “This decision does not preclude or condition in any way the right and duty of the Board of Directors to evaluate the Offer and the fairness of the consideration proposed by Assicurazioni Generali, in the interest of Cattolica and of all its shareholders.”
Generali is offering investors €6.75 per share under the latest buyout offer, which represents a premium of 15.3% over Cattolica’s closing price on 28 May 2021.
The offer is seen as a move to prevent foreign insurers from growing in the Italian market.
It will also establish Generali as the country’s largest player in the non-life sector, pushing UnipolSAI to second place.