Axis/PartnerRe merger under threat as Exor places rival bid

Italian investment firm Exor has put in a $6.4 billion bid to acquire PartnerRe, potentially thwarting Axis Capital’s takeover plans.

Exor, which is controlled by the Agnelli family, submitted the proposal which will see the company pay $130 per PartnerRe share, representing a 16 percent premium to the value offered by Axis, according to the investment company.

“The proposed Exor transaction, which is envisaged to be friendly, can be completed expeditiously. Compared to the all-share combination with Axis, it provides PartnerRe shareholders with superior value and greater certainty since it is all cash, fully financed, and does not require a capital increase by Exor nor a vote by its shareholders,” the statement said.

Exor has invested in re/insurance for two decades, including as a minority investor in PartnerRe when it was formed in 1993. It said that there is significant long-term potential for a global reinsurer such as PartnerRe.

“Its deep underwriting expertise, significant financial strength, scale and diversification would be enhanced by Exor’s permanent capital base and ability to deploy additional resources to accelerate growth under the right conditions, further strengthening its position as a world leading reinsurer,” said the investment company.

PartnerRe confirmed it had received the offer and that it will review the proposal to determine the course of action that it believes is in the best interests of PartnerRe and its shareholders.

Axis however has reaffirmed its commitment to the planned merger. Albert Benchimol, president and chief executive officer of Axis, said: “Axis Capital is fully committed to its combination with PartnerRe. Our transaction with PartnerRe brings together two independently strong companies to create one broadly diversified global specialty insurance and reinsurance company whose scale, capital and enhanced market presence will form a powerhouse within the industry.”

He explained that the combined company will have a strong capital position, significant financial strength, a combined world-class management team and industry-leading talent.

“As such, it will deliver significant operating and capital synergies, as well as an expanded solution set and product offering for clients and partners. We are confident that the combined company is positioned to deliver superior and sustainable value to all shareholders,” said Benchimol.

In light of a rival bid by investment company Exor, should PartnerRe’s shareholders consider other offers and seek a better price or remain loyal to the original merger plans with Axis Capital? Click here to have your say.