Exor Raises PartnerRe Offer in ‘Final’ Push to Beat Axis Bid

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Exor Makes 'Superior' Offer for PartnerRe: Elkann

Exor SpA upped the ante in the takeover battle for PartnerRe Ltd., raising its bid by 5.8 percent in a final push to beat out rival Axis Capital Holdings Ltd. for control of the reinsurer.

Exor, the investment vehicle of Italy’s billionaire Agnelli family, now plans to pay $137.50 a share for the Bermuda-based company. The Turin-based investor has backed its $6.8 billion bid by buying 9.32 percent of PartnerRe. The purchase makes Exor the company’s biggest shareholder surpassing Vanguard Group Inc.’s 7.97 percent.

“Our offer is superior,” Exor Chairman and Chief Executive Officer John Elkann said in an interview with Bloomberg. “Going higher would be irresponsible for our shareholders. This is our final and last offer.”

Exor, which controls Fiat Chrysler Automobiles NV, is pushing for the deal to reduce its exposure to the auto business. It has money to invest after agreeing on Monday to sell real-estate company Cushman & Wakefield Inc. for about $2 billion. The Italian investor continued the pursuit of PartnerRe even after the reinsurer rejected the original $130-a-share bid.

PartnerRe said on May 4 that it favored an all-share merger with Axis, which would create the world’s fifth-largest property-and-casualty reinsurer. The combination would help Bermuda-based Axis compete with larger rivals like Warren Buffett’s Berkshire Hathaway Inc., Munich Re and Swiss Re AG. PartnerRe’s investors now have a sweeter cash option.

Hard to Match

The revised offer “seems to be at a level that will be very hard for Axis to get close enough to keep Exor from winning,” Charles Sebaski, an analyst at BMO Capital Markets, said by e-mail. Representatives for PartnerRe and Axis weren’t immediately available for comment.

PartnerRe rose 1.6 percent to $135.58 at 11:12 a.m. in New York. Axis climbed 0.7 percent to $55.55. Exor fell 1.5 percent in Milan trading, paring its gains this year to 23 percent and valuing the company at 10.3 billion euros ($11.6 billion).

In an effort to seal the deal, Exor has offered PartnerRe a signed merger agreement that can be executed upon termination of the deal with Axis. The Italian investor has also filed proxy materials that allow investors to vote against the rival offer at an upcoming shareholders meeting.

‘Good Complement’

The new offer “takes into account better results than expected” as well as the board’s opposition to the initial offer, Elkann said in the interview.

Under the Axis agreement, PartnerRe shareholders would get about 51.5 percent of the combined company. A revised deal, made after Exor’s April 14 offer, also gives PartnerRe investors a special dividend of $11.50 per share. That gives PartnerRe holders about $126 a share based on Axis’s May 1 closing price of $52.33.

Mergers and acquisitions are accelerating in the insurance business as companies seek to gain scale amid pressure from pension and hedge funds that have been increasing bets on weather-related risks. Axis, which provides coverage in the energy, marine and aviation industries, has highlighted potential cost savings of a merger. Elkann has said there could be less disruption if Exor takes over.

The Agnellis are one of the world’s wealthiest families. Their 51 percent stake in publicly listed Exor is valued at about $6 billion. Elkann, who took the helm of the family’s investments in 2004, has been seeking to balance out the family’s reliance on car and truck markets and has been raising funds for the purpose. In addition to the Cushman & Wakefield deal, Exor sold product-testing company SGS SA for 2 billion euros in 2013.

The PartnerRe would give Exor “a broader scope of activities,” said Elkann. The deal would be “a good complement” to capital-intensive industrial businesses like Fiat and truck and tractor maker CNH Industrial NV.

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