PartnerRe Rejects EXOR Offer; Confirms AXIS Deal w/ Enhanced Terms

May 4, 2015

Bermuda-based PartnerRe Ltd. announced that its Board of Directors has rejected the unsolicited proposal by EXOR S.p.A. to acquire PartnerRe at a price of $130 per share, and reconfirmed its commitment to the planned merger with AXIS Capital Holdings Limited.

The bulletin also announced “enhanced merger terms that allow PartnerRe to pay a one-time special dividend of $11.50 per common share to PartnerRe common shareholders prior to the closing of the amalgamation agreement between PartnerRe and AXIS Capital.”

The bulletin noted that PartnerRe’s Board had “held extensive discussions with EXOR, who announced their unsolicited all cash proposal on April 14, 2015. The discussions with EXOR were facilitated by way of a waiver secured by PartnerRe from AXIS Capital following receipt of the EXOR proposal, allowing PartnerRe to engage with EXOR to properly and thoroughly evaluate the many aspects of its proposal.”

During those negotiations the Board pointed out that EXOR maintained its original offer at $130 per share, “and indicated that due diligence on PartnerRe would be “confirmatory” only and that there would be no price improvement. Despite numerous attempts by the PartnerRe Board to negotiate on price, EXOR stated that $130 per share was its best and only offer.”

As a result the announcement said the Board reached the conclusion that “the EXOR proposal does not properly or adequately value PartnerRe, as it does not fully recognize the strength of its balance sheet and the value of its franchise.”

In addition the announcement indicated that the Board had “determined that superior value is created through the enhanced merger terms with AXIS Capital, and the substantial long-term value potential of the combination with AXIS Capital.” As a result, and after consultations, PartnerRe’s Board “unanimously rejected the EXOR proposal and terminated all discussions and negotiations with EXOR with respect to its proposal.”

PartnerRe Chairman Jean-Paul Montupet stated: “Over the course of the past three weeks, the Board, as well as our advisors, engaged extensively with EXOR and conducted a very careful and thorough evaluation of the many aspects of their proposal, including price. Throughout these discussions, EXOR made it abundantly clear that it was not willing to adjust its price.

“The Board concluded that EXOR’s proposal significantly undervalued PartnerRe and that there was no prospect of the offer leading to a superior proposal. Consequently, we determined that further discussion would not be productive and we have rejected their proposal.”

The enhanced merger terms have been agreed to by both PartnerRe and AXIS Capital, and both companies have “reaffirmed their commitment to the merger of PartnerRe and AXIS Capital and the substantial opportunities that will be created by this combination, including synergies of at least $200 million,” the announcement said.
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Montupet added: “On behalf of the entire PartnerRe Board, I am very pleased with the new terms agreed with AXIS Capital as they appropriately recognize for our shareholders the significant value of our Company. We continue to be very excited by the prospects of our amalgamation with AXIS Capital, which we firmly believe will create value well in excess of the proposal made by EXOR, and will give shareholders the opportunity to be a part of a world-class specialty insurance and reinsurance franchise and to share in the value such a combination will generate well into the future.”

PartnerRe will hold a conference call at 11:00 A.M. EDT today to further discuss the merger with AXIS.

Source: PartnerRe

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