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PartnerRe directors reaffirm recommendation to be bought by EXOR


September 15, 2015   by Canadian Underwriter


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PartnerRe Ltd. announced Tuesday its board “reaffirms” its recommendation to be acquired by EXOR S.p.A. now that a “go shop” period has expired without any other acquisition proposals.

Pembroke, Bermuda-based PartnerRe, which has a branch office in Toronto, writes reinsurance and commercial specialty insurance worldwide. PartnerRe announced Aug. 3 it agreed to be acquired by Turin, Italy-based EXOR, an investment firm controlled by the Agnelli family, whose holdings include a significant minority of Fiat Chrysler Automobile shares.

EXOR’s agreement to acquire PartnerRe, valued at about $6.9 billion, included a “go-shop” period, allowing PartnerRe’s board to “actively solicit and evaluate any competing offers” and to enter into negotiations with potential buyers if proposals were received before Sept. 14.

A go shop period has expired, paving the way for insurance carrier PartnerRe Ltd. to be bought by EXOR

“An extensive outreach was conducted by Credit Suisse and Lazard, acting as PartnerRe’s co-financial advisors,” PartnerRe stated in a press release Tuesday. “None of the third parties contacted during this process provided a proposal or offer regarding an alternative acquisition proposal.”

PartnerRe added its board “reaffirms its recommendation that shareholders of PartnerRe vote to adopt the merger agreement, the statutory merger agreement and all related transactions.” PartnerRe is traded on the New York Stock Exchange.

“As previously announced, the acquisition of PartnerRe Ltd. by EXOR is expected to close during the first quarter of 2016, subject to the approval of PartnerRe shareholders, as well as the satisfaction of certain customary closing conditions, including antitrust and insurance regulatory approvals,” the company stated.

When PartnerRe and EXOR announced their agreement Aug. 3, PartnerRe announced the termination of a separate merger agreement with Axis Capital Holdings Ltd. Like PartnerRe, Axis Capital is also based in Bermuda, has a branch office in Toronto and writes reinsurance and commercial specialty lines. The merger agreement between Axis Capital and PartnerRe was originally announced Jan. 25 and would have created a “global top 5 reinsurer,” Axis Capital stated at the time.

At the time, Costas Miranthis stepped down as PartnerRe chief executive officer with David Zwiener filling in as interim CEO.

EXOR originally offered to buy PartnerRe April 14 for US$130 a share. It later increased that offer to US$137.50 a share plus a $3 special dividend.

Several times between April 14 and Aug. 3, EXOR and PartnerRe increased their offers.

Before Aug. 3, PartnerRe was recommending its shareholders vote in favour of a merger with Axis Capital. Had that merger gone through, PartnerRe shareholders would have owned 51.6% of the merged firm and Axis Capital shareholders would owned the other 48.4%. PartnerRe shareholders would have received 2.18 shares of the combined company for each share of PartnerRe common shares they own, as well as a special dividend of US$17.50 per share. Axis Capital shareholders would have received one share of the post-merger firm per Axis Capital common share.

“We have carefully and thoroughly evaluated each development over the past several months, and believe that this thoughtful and deliberate approach was critical to delivering a transaction that represents a significant improvement in the price and terms of EXOR’s original proposal,” PartnerRe chairman Jean-Paul Montupet stated Aug. 3 release. “Importantly, EXOR is committed to ensuring that the unique culture, brand and business that our dedicated employees have successfully built over the past 20 years remain intact.”


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