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Tunisia: AMI Insurance's hunt for strategic partner falls through

Source: Middle East Insurance Review | Feb 2017

Tunisian insurer AMI Insurance (Assurances Mutuelles Ittihad) has announced that it had failed to attract any bid for its tender for a capital increase reserved for a strategic partner when the tender closed on 16 December 2016.
 
   This is despite several local and international insurance players expressing their interest in the stake. Some also carried out due diligence and pursued advanced discussions with AMI and the merchant bank, Business Bank of Tunisia.
 
   The main reason for the lack of a bid is that the block of shares reserved for the strategic partner was set at 35% after the capital increase. The proportion was judged to be low and disproportionate to the commitments requested of investors in the transfer of skills and development, said AMI.
 
   According to consultations between interested investors and the authorities, the access to majority shareholding or any pact with one of the current main shareholders would have obliged the investors to launch a public offer for the rest of the shares of the insurer on market terms. Investors believed that the market price could not reflect the value of the total free float of shares. 
 
   In addition, the path to the majority requires administrative approvals on which no guarantee could be obtained a priori.
 
   Last November, media reports said that at least five local and foreign insurers, including three Moroccan groups, had shown interest in acquiring a stake of up to 35% in AMI.
 
   AMI, which started operations in 2003, was founded by the Tunisian General Union of Labour to provide non-life insurance to members following the liquidation of El Ittihad, an insurance and reinsurance cooperative. In 2014, AMI changed its status from an insurance mutual to that of a limited company so as to strengthen its capital base. Shareholders approved a restructuring programme which included looking for a strategic partner which could strengthen the competitive position of the insurer. 
 
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