Two Italian private equity funds said on Wednesday they would be tabling a renewed offer for insurer Fondiaria-SAI (FOSA.MI)

It comes a day after Unipol's (UNPI.MI) plan to rescue its troubled peer was dented when a court administrator asked for a key capital increase at Fondiaria parent Premafin (PRAI.MI) - a requirement of the deal - to be reviewed and possibly revoked.

Such a legal decision could trigger a delay in two subsequent rights issues at Unipol and Fondiaria, both aimed at shoring up the depleted capital base of loss-making Fondiaria, and could prompt insurance watchdog ISVAP to take action.

Along with these fresh hurdles, Unipol now faces competition from the two private equity funds: Sator, controlled by seasoned banker Matteo Arpe, and Palladio Finanziaria. They have already made two offers for Fondiaria - both of which have expired.

But at Fondiaria's shareholder meeting on Wednesday, the funds, which together own 8 percent of the insurer, said they would unveil another offer in coming days.

Shareholders at the meeting also approved Fondiaria's cash call, but CEO Emanuele Erbetta said a halt to Premafin's rights issue could delay its own plan to raise capital.

Unipol agreed in January to a deal - brokered by investment house Mediobanca (MDBI.MI) - to merge with Fondiaria, parent Premafin and unit Milano Assicurazioni (ADMI.MI).

But the deal has been slowed by regulatory headaches and squabbling between Unipol and the Ligresti family who, through Premafin, control Fondiaria.

"ISVAP has conceded a lot of time and needs Fondiaria to recapitalize urgently. It would take a dim view of any delays," a Milan analyst said.

Fondiaria's solvency ratio - a measure of financial strength - has long been below regulatory standards. ISVAP has called for action to avert placing it under court-appointed administration.

This month, ISVAP gave a conditional blessing to the Unipol deal, but warned the new entity had to keep its solvency ratio above the regulatory standard of 120 percent.

Unipol, Italy's No. 3 listed insurer, has said it wants to carry out the two, 1.1-billion euro capital increases at Unipol and Fondiaria in July.

The deal is awaiting the green light from market watchdog Consob, though this could arrive on Thursday.

The survival of Fondiaria, Italy's biggest car insurer, is important for Mediobanca, which is owed 1.1 billion euros by the group.

It is also a concern for Italy's biggest bank, UniCredit (CRDI.MI), which owns around 6 percent of the insurer and is Premafin's biggest creditor bank.

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