| At a glance: Deal size: €2.2 billion Bookrunners: Deutsche Bank, Dresdner Kleinwort Wasserstein, Goldman Sachs Date: September 11, 2005 |
In September 2005 Allianz sought to take full control of its majority-owned Italian subsidiary, Riunione Adriatica di Sicurta (RAS), but found itself facing a difficult but not uncommon problem. It needed to raise equity in order to fund its €5.7 billion cash tender offer but could not be certain exactly how much it would need, as this would depend on how much of its offer would eventually be taken up by RAS’s other shareholders.
Allianz needed sufficient cash to be able to pay off the other shareholders in RAS, should they all accept its cash offer, but also faced the possibility that they might opt instead to become shareholders in Allianz on completion of the merger. Like any other company in this sort of situation, Allianz was keen to avoid issuing more shares than absolutely necessary in order to avoid dilution.
However, its solution to this everyday M&A financing dilemma was not a straightforward rights issue or secondary share offering.
Allianz and its bookrunners decided to issue just half the €2.2