March 24, 2021 by Greg Meckbach
The Hartford Financial Services Group Inc. announced Tuesday its board of directors is not in favour of a US$23 billion takeover offer from Chubb Limited.
Both Chubb and Hartford own Canadian property and casualty commercial insurers.
Zurich, Switzerland-based Chubb announced Mar. 18 that it was offering to buy The Hartford for US$65 per share, a 26% premium over its most recent share price. That offer was not put directly to shareholders of The Hartford, which is publicly traded. Initially, Hartford said it would carefully consider the proposal. Hartford is based in Hartford, Conn.
On Mar. 23, The Hartford said its board “unanimously rejected” the proposed acquisition by Chubb after consulting with legal and financial advisors.
It is not clear whether Chubb will go directly to The Hartford shareholders with a hostile takeover attempt, increase the price of its offer, or withdraw completely.
The Hartford said Tuesday its board “determined that entering into discussions regarding a strategic transaction would not be in the best interests of the company and its shareholders. The board reaffirmed its commitment and resolve in the continued execution of The Hartford’s strategic business plan.”
The Hartford did not say how it would be detrimental to its shareholders if they could sell their shares to a buyer at a 26% premium.
Hartford’s Canadian branch office is in Newmarket, Ont., about 50 kilometres north of downtown Toronto. It wrote about $6.5 million in premiums in Canada in 2019.
Chubb was known as ACE until ACE acquired Warren, N.J.-based The Chubb Corporation in 2015. Chubb ranked 19th among Canadian P&C insurers in 2019 by net premiums written.
Feature image via iStock.com/bankrx