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Allianz war timing sends investors diving for cover

Issuer: Allianz Size: e3.5 billion to e4 billion Bookrunners: Citigroup, Deutsche Bank, Goldman Sachs, UBS Warburg

Michael Diekmann, the new CEO of Allianz doesn't need much sleep. At least that's what launching a rights issue on the day Britain and the UK start their war on Iraq suggests. Either that, or Allianz is so desperate for cash that it simply couldn't wait. "The fact that it has come now when the markets are so depressed indicates that there's a degree of urgency," says Matthew Leeman, a fund manager at SG Asset Management.

And there's nothing like a company that really needs money to turn investors right off. "You have to ask yourself, 'what is in this for us?' Are we just paying for the mistakes of the past?" says Henning Gebhardt, head of German equities at DWS Investments in Frankfurt. "The dilution effect is massive and the future business Allianz will have to generate to compensate for that is huge."

Bankers working on the deal say timing is not an issue. "Many rights issues come from companies that have waited far too long," says Michael Klein, CEO of investment banking for EMEA at Citigroup. "This is a sensible move at the right time."

But in fact, since mid 2002 a succession of insurance companies, as well as firms in other sectors, have held out the begging bowl with varying degrees of success.

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