PartnerRe Rejects $6.4 Billion Exor Offer, Sticks With Axis

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PartnerRe Ltd. rejected an unsolicited $6.4 billion takeover offer from Italy’s Exor SpA, opting to stick with merger partner Axis Capital Holdings Ltd.

Enhanced merger terms with Axis will allow reinsuer PartnerRe to pay a one-time special dividend of $11.50 a share, according to a statement Monday from Bermuda-based PartnerRe.

PartnerRe over the past three weeks “engaged extensively with Exor and conducted a very careful and thorough evaluation of the many aspects of their proposal, including price,” Chairman Jean-Paul Montupet said in the statement. “Throughout these discussions, Exor made it abundantly clear that it was not willing to adjust its price.”

Axis said in January that a combination with PartnerRe would create the world’s fifth-largest property-and-casualty reinsurer. While a merger could help Bermuda-based Axis compete with larger rivals like Warren Buffett’s Berkshire Hathaway Inc., Munich Re and Swiss Re AG, analysts including Josh Shanker at Deutsche Bank AG and Charles Sebaski at BMO Capital Markets questioned whether the original agreement was favorable for PartnerRe’s shareholders.

“The PartnerRe transaction with Axis is the product of a flawed process,” according to a separate statement Monday from Exor, which is led by the Agnelli family. “Notwithstanding the PartnerRe board’s continued support for a still inferior transaction with Axis, PartnerRe shareholders will ultimately decide which transaction is superior.”

Cash Offer

PartnerRe dropped 1.6 percent to $126.27 at 10:16 a.m. in New York. Axis slipped 1.2 percent. Exor advanced 1.6 percent in Milan.

PartnerRe surged April 14 in New York trading when Exor announced that it offered $130 per share in cash and said that figure was 16 percent more than the implied value under the agreement with Bermuda-based Axis. PartnerRe climbed to $129.25 that day from $119.14 on April 13 and $114.14 on the last trading day before the Axis agreement was announced.

Shareholders of PartnerRe would hold about 51.5 of the combined company if the Axis deal is completed, according to the statement. The revised deal values PartnerRe at about $125 Sebaski said.

The latest proposal is “much closer to the Exor offer,” Sebaski said in an interview Monday. “It’s still below, but the disparity is not as high.”

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