Sale by PPF Investments keeps insurersArdaf and RAI in the family

Czech-based group PPF Investments has almost completed the sale of Ardaf and RAI to the joint venture Generali-PPF. According to sources close to the sale, the deal is in its final stages.

Therefore, the Czechs are poised to strike a deal "in the family", in light of the fact that PPF Investments is a subsidiary of PPF Group, which recently formed a joint-venture with Generali that brings together the operations of the two groups in Central and Eastern Europe. Italy's Generali group owns 51% in the joint venture and PPF 49%.
The price of Ardaf and RAI has not been revealed. However, under normal circumstances, the price should be double the amount initially invested by PPF Investments, yet given that the deal is "in the family", the amount paid by Generali PPF could be lower.
PPF Investments bought Ardaf, one of the top ten companies on the market, and RAI Asigurari, a smaller player, in a package deal worth 40 million euros a year ago - 35 million euros was paid for Ardaf and around 5 million euros for RAI Asigurari.
After the acquisition, the Czech fund invested another 40 million euros in Ardaf via capital increases. The Czechs bought Ardaf from businessman Ovidiu Tender and RAI from the Tudor family, with Daniel Tudor later appointed chairman of Ardaf.
In 2006, Ardaf experienced cash flow problems, when the Insurance Supervision Commission subjected it to a financial recovery plan, in the wake of losses that amounted to 35 million euros. In 2007, when its shareholders changed, the insurer managed to cut its losses by 70% to around 10.5 million euros, while its turnover declined by 10%, after gross underwritten premiums amounted to 50 million euros. RAI Asigurari posted revenues worth around 6 million euros in the first nine months of last year. Ardaf is listed on the Bucharest Stock Exchange with a market value standing at 54 million euros if calculated at the latest trading price of 0.104 RON/share.
The quoted sources say that as a result of this deal, Generali will back out of the race to take over Asiban, for which binding offers are due to be submitted early in March.
This would leave five groups in the running to bid for Asiban: Groupama (France), AXA (France), Eureko (Netherlands), Fondiaria (Italy) and Uniqua (Austria).