Italy's Unipol makes buyout offer valuing UnipolSai at $8.2 billion

By Andrea Mandala

(Reuters) -Italian financial group Unipol announced on Friday an offer for the 14.75% of UnipolSai it does not own, valuing the insurer at 7.64 billion euros ($8.2 billion) in a deal to simplify the group's structure.

Shares in Unipol jumped as much as 23.5% after the long-awaited move, hitting their highest level since February 2012. Shares in Italy's second-largest insurer UnipolSai, whose board approved the offer, rose as much as 12.4%.

"It's the final step in a simplification process that started a long time ago and now the conditions have been created", Unipol Chairman Carlo Cimbri told a press conference.

A single, combined entity listed on the Milan bourse, would allow costs savings, optimise the company's cash and funding profile, and simplify decision making, he added.

Unipol will offer 2.70 euros for each UnipolSai share it does not own, a premium of 12.6% to UnipolSai's Feb. 15 closing price, the group said.

Alternatively, it will offer three of its own shares for every 10 UnipolSai shares, allowing shareholders in UnipolSai to become investors in Unipol.

Unipol said it would use its own financial resources for the deal. The cash offer, if taken in full, would be worth 1.13 billion euros.

The group will change its name to Unipol Assicurazioni SpA after the deal, which is expected to close by the end of 2024.

Analysts said the merger would simplify Unipol's position in a consolidating banking sector. However, Cimbri ruled out a change in the group's strategies.

Unipol is a top shareholder - with stakes of nearly 20% each - in mid-sized Italian lender BPER Banca and smaller peer Popolare di Sondrio, and is seen as a potential key player in any consolidation.

Cimbri, a prominent figure in Italian finance who in recent years has steered BPER onto a path of expansion, has said in the past that Pop Sondrio was "a natural" merger option for BPER.

On Friday, he repeated that BPER was not interested in a merger with Banca Monte dei Paschi, which is currently 39% owned by the Italian state after the successful placement of a stake on the market in November.

Cimbri added that Unipol's stakes in BPER and Pop Sondrio "are not, nor have they ever been, for sale".

UnipolSai also said its 2023 consolidated net profit rose to 766 million euros from 651 million in 2022. It proposed a dividend per share of 0.165 euros, versus 0.16 euros the previous year.

Mediobanca advised UnipolSai's board of directors while Rothschild & Co was financial adviser to UnipolSai's related-party transactions committee.

Jefferies advised Unipol's board of directors for both the merger and the tender offer, while UBS Europe acted as financial adviser to Unipol's related-party transactions committee.

($1 = 0.9293 euros)

(Reporting by Alberto Chiumento, Gianluca Semeraro and Andrea Mandalà, Editing by Alvise Armellini, Mark Potter and Emelia Sithole-Matarise)