Coup de scene in the Italian insurance sector. Generali has launched a total takeover bid on Cattolica insurance. The offer concerns 174.293.926 ordinary shares of the Veneto company, ie 66,67% of the share capital with voting rights or at least 50% plus 1 share of the share capital with voting rights. In recent months, the Leone company had already purchased i24% of Cattolica, subscribing thecapital increase and becoming the first shareholder.
The established price amounts to 6,75 euros per share, a figure which incorporates a premium of 15,3% with respect to the closing price of Cattolica shares on Friday 28 May and of 40,5% with respect to the average recorded in the last 6 months. According to calculations, the maximum outlay should be from 1,176 billion and the Trieste group will use its own financial resources, without resorting to financing.
"The offer is promoted by Generali with the aim of consolidating its position in the Italian insurance market", reads a note, which underlines that, if the operation goes through, the Lion's company will become "the first group in the non-life market” and will be able to “strengthen its presence in the life market”. Another purpose is to proceed with the delisting of Cattolica in order to favor "the objectives of integration, creation of synergies and growth" of the two insurance groups.
Lastly, Generali estimates that, once fully operational, the operation will lead to an increase in the incidence of profits deriving from the non-life business, in line with strategic preferences in terms of resource allocation for inorganic growth. Rothschild, Bofa and Mediobanca act as advisors to Generali in the takeover bid.
Immediate the stock market reaction of the Cattolica stock. The shares, after having struggled to raise the price, entered trading and are up 12,8% to 6,83 euros, above the 6,75 euros offered by Generali in the takeover bid. The Generali share, on the other hand, is slightly above parity (+0,12%), at 16,865 euros.
Curiously, in this morning's lightning board of directors of Generali Francesco Gaetano Caltagirone and Leonardo Del Vecchio, the second and third shareholder of Generali after Mediobanca, who recently never missed an opportunity to criticize the management of Philippe Donnet, gave their assent to the Totalitarian takeover bid. It is also striking that among the advisors of Leone for the assault on Cattolica, in addition to Bofa and Rothschild, Mediobanca: it means that Piazzetta Cuccia fully supports Donnet and that the CEO of Generali wants to go to a definitive clarification with Caltagirone and Del Old? We'll see, but certainly a hot front is opening up in Italian finance on the Generali-Mediobanca axis. Although another key to interpreting Donnet's surprise move can be linked to the fact that the complexity of the initial Generali-Cattolica transaction risked opening up conflicts of interest that are not easily manageable and which the totalitarian takeover bid can instead resolve. But one interpretation does not necessarily exclude the other and only time will clarify.
Finally, we recall that, after having changed the governance and above all after the transformation into a Spa, Cattolica published on Friday quarterly premium accounts, closed with adjusted profit up 161% to €48m, EBIT above €100m (+82%) and net inflows of €1,3bn (+16%), with a slight increase in P&C (+2,8%) and Life (+27%).
