Deminor reaches a settlement in the Italian Fondiaria case


Deminor communicates to have reached a settlement with UnipolSai and Mediobanca on behalf of a group of former minority institutional and private shareholders of La Fondiaria Assicurazioni (“Fondiaria”). The settlement follows a long court battle that centred on the question whether minority shareholders are entitled to damages in case of breach of takeover laws by a listed company.

The investors’ claims stemmed from the takeover of Fondiaria by a consortium of bidders consisting of Mediobanca, SAI and Premafin. The bidders had paid a substantial premium over the then prevailing market price to acquire a controlling stake from Montedison, without making an offer to buy-out Fondiaria’s minority shareholders. However, SAI then used its voting power to force a merger upon Fondiaria’s shareholders at penalizing terms.

Deminor’s clients had to take the case all the way up to the Italian Court of Cassation (“Suprema Corte di Cassazione”) to get relief. In a landmark ruling of 27 January 2016, the Court of Cassation established a new principle of law in the Italian judicial system - which is one of the cornerstones of E.U. investor protection - that takeover laws are not only meant to ensure the sound functioning of financial markets but also to protect minority shareholders’ rights. Therefore, if these laws are breached, shareholders can go to court to claim damages, even if the company that breaches the law has been fined by the market supervisory authority.

When it comes to assessing damages, the Court of Cassation ruled that shareholders can claim compensation for the loss of a chance when they are deprived of the right to sell their shares at a premium over the market price following a change of control.

Following the Court of Cassation’s ruling, the case was referred back to the Court of Appeal of Milan to assess damages. However, a settlement was then reached which brought a definitive end to the dispute.

After many years of hard fought litigation and thanks to the active support of Elliott Advisors (UK) Limited and P. Schoenfeld Asset Management LP (“PSAM”), a settlement could be reached in which Deminor’s clients recovered a substantial part of the premium, plus interest, that they were entitled to in connection with the takeover of Fondiaria.

Peter M. Schoenfeld, founder, Chief Executive Officer and Chief Investment Officer of PSAM said: “We are pleased that we could contribute to the establishment of this important legal principle of Italian takeover law, from which other minority investors in Italy will be able to benefit in the future.

Deminor’s clients were legally assisted by the Italian law firm Nunziante Magrone and Prof. Avv. Filippo Donati.


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