Hedge Fund Sandell Criticizes PartnerRe for Shunning $6.8B EXOR Offer

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Sandell Asset Management Corp., the activist hedge-fund firm, amplified its criticism of PartnerRe Ltd. for shunning the unsolicited $6.8 billion takeover offer from EXOR SpA that would break up the reinsurer’s planned merger with AXIS Capital Holdings Ltd.

“We believe that the board is doing this in order to protect the AXIS transaction, in disregard of the shareholders’ best interests,” Chief Executive Officer Thomas Sandell wrote to PartnerRe in a letter Thursday. “We find this action egregious in today’s corporate environment of increased shareholder engagement.”

PartnerRe shareholders are scheduled to vote July 24 on the planned merger with Axis, which would create the fifth-largest property-casualty reinsurer. EXOR, led by Italy’s Agnelli family, has urged a vote against the deal and offered this week to increase the dividend on PartnerRe preferred shares by 1 percentage point if it wins the bidding.

Sandell’s letter builds on his criticism of PartnerRe’s board in May after the Bermuda-based company said that constructive talks were impossible with EXOR.

“The ongoing actions of the board raise significant questions about the board’s commitment to a fair process and are inconsistent with corporate governance best practices,” he wrote in the letter Thursday.

–With assistance from Selina Wang and Katherine Chiglinsky in New York.