EXOR Says Remains ‘Fully Committed’ to Spurned PartnerRe Offer

By | May 4, 2015

Italy’s EXOR said on Monday it remained fully committed to its $6.4 billion offer for PartnerRe after the Bermuda-based reinsurer rejected its attempt to trump a rival bid by AXIS Capital Holdings.

EXOR’s decision to press ahead with its offer means PartnerRe shareholders will now have to decide which deal is sweeter, and indicates that it is unlikely to up its bid for the time being.

The Italian holding company, controlled by the Agnelli family, made its all-cash offer for PartnerRe in April, disrupting an $11 billion all-share deal between AXIS and PartnerRe to create one of the world’s largest reinsurers.

But earlier on Monday PartnerRe said it had rejected EXOR’s proposal, arguing it undervalued the company.

In a joint statement, PartnerRe and AXIS said their merger deal would now also include a one-off cash dividend of $11.5 per share for PartnerRe shareholders when it closes in the third quarter.

EXOR said it still considered its own proposal superior and that it would be up to PartnerRe shareholders to make up their minds.

“AXIS’ revised transaction still undervalues PartnerRe,” it said in a statement.

“EXOR is therefore determined to pursue its transaction on the proposed terms and is fully committed to achieving its rapid completion,” it added.

EXOR, which controls carmaker Fiat Chrysler Automobiles, is offering $130 per PartnerRe share, or a 16 percent premium to the implied value under the original AXIS agreement.

The Italian firm said on Monday the special dividend offered in the AXIS deal would reduce PartnerRe’s capital by more than $550 million and significantly weaken the reinsurer’s financial strength.

AXIS and PartnerRe said they still expected cost savings of more than $200 million from their merger.

In April, PartnerRe’s second-biggest shareholder told Reuters that EXOR’s offer was “much superior” to a deal with AXIS.

EXOR shares ended up 1.5 percent on Monday while the Italian blue-chip index closed up 0.7 percent. PartnerRe shares were down 1.1 percent at 1613 GMT.

(Editing by Pravin Char)

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