Two private equity funds have jeopardized a deal being brokered by Mediobanca, the Milan-based investment bank, to rescue Fondiaria-SAI, a loss-making insurance group with asset management and real estate interests.

Mediobanca has been working on a €1.8bn rescue plan involving the sale of Fondiaria-SAI to Unipol, an insurance group based in Bologna.

The intervention by Palladio Finanziaria, a Swiss private equity fund manager, and Sator, the investment vehicle of banker Matteo Arpe, puts the deal in question. The two fund managers have agreed to consult before the shareholder meeting due to be held in March. They have a combined shareholding in Fondiaria-SAI of 8%.

Much rides on the success of the deal, as Mediobanca and UniCredit among others own large stakes in the business, as part of a complex network of cross-holdings.

Mediobanca has exposure of €1bn in loans made to Fondiaria and €400m to Unipol. Fondiaria is expected to post a loss of €1bn for 2011, while Fondiaria’s capitalization has collapsed from €5bn five years ago to €716m today.

Interest is being generated in the potential sale of non-core assets, which the Italian anti-trust regulator may stipulate as a condition of the merger. AXA has expressed interest in assets that Unipol Gruppo Finanziario and Fondiaria-SAI may be called on to sell.