PartnerRe Weighs New Deal Terms With Axis to Fend Off Exor

PartnerRe Ltd., seeking to fend off a hostile $6.8 billion cash bid from Exor SpA, is weighing whether it can arrange new terms with rival reinsurer Axis Capital Holdings Ltd. to preserve their planned merger.

The two Bermuda-based insurers postponed shareholder votes that were scheduled for July 24 and will instead hold meetings on Aug. 7, PartnerRe and Axis said Friday in a statement.

Exor, the billionaire Agnelli family’s investment firm, met with investors Tuesday to persuade them to vote against the Axis merger plan. Exor Chairman John Elkann offered to lift the dividend on PartnerRe preferred shares by one percentage point if his bid is successful, and said he won’t call three series of the securities until 2021.

“PartnerRe and Axis Capital are committed to ensuring that common and preferred shareholders benefit materially from the combination,” the reinsurers said in the statement. They said new terms will be released in the “near term.”

Amit Kumar, an analyst at Macquarie Group Ltd., and BMO Capital Markets’ Charles Sebaski have said Exor’s sweetened terms may have been winning over PartnerRe shareholders.

“It is no secret that investors and other sell-siders continue to switch and put a lower probability on Axis-PartnerRe deal making it past the finish line,” Kumar wrote in a note to clients on Thursday.

PartnerRe and Axis seek to create the world’s fifth-largest property-and-casualty reinsurer through a merger that would diversify risks. The added scale could help the company withstand competition from new rivals, including Wall Street investors who are pursuing weather-related bets that are uncorrelated with financial markets.

‘Flawed Process’

PartnerRe’s effort to revisit the deal terms should be considered a sign that Exor’s offer is superior, Elkann’s company said in a separate statement.

“By postponing its own shareholder meeting, PartnerRe continues its attempts to rescue an inferior transaction that is the result of a flawed process,” Exor said.

PartnerRe gained 0.5 percent to $131.84 at 12:56 p.m. in New York, compared with Turin-based Exor’s offer of $137.50 a share. Axis climbed 1 percent, and Exor rose 2.3 percent in Italy.

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