Exor reveals enhanced offer; PartnerRe remains critical

Italian investment company Exor has unveiled an enhanced offer for PartnerRe which has been criticised by the Bermuda-based reinsurer.

The enhanced offer has expanded Exor’s legally binding guarantee for the transaction to cover not only the payment obligations under the merger agreement, but the contractual commitments in the merger agreement.

“The expanded guarantee underpins Exor’s commitment to satisfying all of the contractual terms of the EXOR parties, including in relation to obtaining regulatory approvals,” said Exor. “This enhancement underscores Exor’s previous commitment to provide even greater certainty of closing following its on-going, constructive conversations with PartnerRe’s shareholders.”

Exor added that its offer contains no execution risk, an issue PartnerRe’s board has made repeatedly in the past.

“Exor’s offer is binding, fully financed and requires no due diligence. Exor ranked #24 in the Fortune Global 500 in 2014, and has over a century of experience in investing in, undertaking and completing complex transactions,” said the investment company.

However, the board of PartnerRe has said it continues to believe that Exor’s offer poses significant and unacceptable risks, while also substantially undervaluing the company.

“The only material modification by Exor to its proposed contract is that EXOR SpA will now assume responsibility should one of its shell subsidiaries breach the contract. PartnerRe had identified this as a significant risk from the onset,” said PartnerRe.

“Exor’s effort to address this risk – after four intervening revisions to the merger agreement terms since April 2015 – is confirmation that Exor has clearly been attempting to mislead PartnerRe shareholders while limiting its own liability.”

It added that the regulatory walkaway risk still remains as neither Exor nor the Agnelli family is obligated to file and obtain regulatory approval in any jurisdiction.

“Should Exor and its controlling family members elect to not appropriately pursue regulatory approvals, Exor’s shell subsidiaries have no legal ability to force Exor and its controlling family members to file for regulatory approval,” said the Bermuda-based reinsurer.