AppId is over the quota
* Fondiaria parity proposal short of Unipol's request
* Fondiaria down after a brief suspension
* Unipol reaction "chilly" - source (Releads, adds Fondiaria statement, source, shares)
MILAN, May 18 (Reuters) - Troubled Italian insurer Fondiaria-SAI has proposed terms for a planned merger with rival Unipol that may prove an obstacle to a deal to create Italy's No. 2 insurer.
Fondiaria on Friday proposed giving Unipol a 61 percent stake in the new merged company. Unipol had previously said it wanted some 67 percent of the new insurance group.
A source close to the matter said Unipol's first reaction was "chilly". Unipol declined to comment.
The difference between the two prompted two Italian newspapers on Friday to speculate that Unipol could withdraw its offer.
At 1115 GMT Fondiaria shares were down 7.4 percent after earlier being suspended for big losses while Unipol shares were unchanged.
In January, Bologna-based Unipol agreed to a complex deal brokered by top investment bank Mediobanca to rescue loss-making Fondiaria in a four-way merger involving Fondiaria parent Premafin and its unit Milano Assicurazioni .
Under Fondiaria's proposal, Fondiaria would have 27.4 percent in the merged company, while Milano Assicurazioni would hold a 10.7 percent stake and Premafin a 0.85 percent stake.
Premafin said on Thursday, it put its stake in the new insurance group in a range of 0.98-1.66 percent.
The Unipol offer involves three capital increases designed to help bring Fondiaria's solvency ratios back to legally required levels. Fondiaria posted a loss of more than 1 billion euros last year partly due to the financial crisis.
Fondiaria is also at the centre of a widening judicial investigation involving Salvatore Ligresti, the head of the family that controls Premafin.
Two Italian private equity funds have made a rival bid to take over Fondiaria.
The insurer said on Thursday it would continue to look into the rival offer from the funds - Palladio Finanziaria and Sator. But it also said the offer would be dropped if its share swap ratio proposals for the Unipol deal were accepted. (Reporting by Stephen Jewkes; Editing by Mark Potter and Jane Merriman)
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