UPDATE 1-Italian court rejects challenge to Cattolica capital increase

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MILAN, Aug 24 (Reuters) - An Italian court has rejected a request by some shareholders in Cattolica to cancel approval of a 500 million euro ($592 million) capital increase, the insurance group said on Monday.

The capital increase, executed by Cattolica’s board earlier this month, paves the way for a tie-up with Italy’s top insurer Generali, which committed to subscribe to 300 million euros of the capital increase.

Last month, investors representing 0.03% of Cattolica’s equity capital took legal action in a Venice court to challenge a resolution at an extraordinary shareholders’ meeting on June 27 to allow the board to execute the capital increase, which was requested by insurance regulator IVASS.

“The deal with Generali goes on as envisaged,” Cattolica said in a statement.

The deal will make Generali Cattolica’s largest shareholder with a 24.4% stake, leapfrogging Warren Buffett’s Berkshire Hathaway, which is currently the top investor with a 9% stake.

$1 = 0.8452 euros Reporting by Giulio Piovaccari; Editing by Susan Fenton and Jane Merriman