Confusion over whether Arch is bidding for AXIS, or not

by Artemis on June 19, 2015

The latest media reports about the reinsurance M&A activity involving AXIS Capital, PartnerRe, EXOR and, the most recent name added to the fray, Arch Capital Group, state that AXIS has not been approached by Arch.

After the FT reported earlier this week that Arch had made an informal offer of $65 per share for AXIS Capital, seemingly trying to capitalise on the confusion caused by the war of words in the three-way tussle between AXIS, PartnerRe and Italian holding company EXOR.

But according to Reuters that report was inaccurate and AXIS has not had talks with any other potential acquirer since it began the merger process with Bermudian reinsurance firm PartnerRe.

A number of sources told Reuters that no approach, informal or otherwise, has been made by Arch since the PartnerRe – AXIS amalgamation discussions started.

Separately, analysts at BMO Capital Markets said that if Arch did make a bid for AXIS it would be unlikely to succeed.

Senior reinsurance industry execs that Artemis has spoken with this week also expressed some confusion, both at why this three or four-way M&A tussle has ended up in such a war of words and whether an Arch AXIS combination would actually be an easy transaction to execute.

An Arch and AXIS amalgamation could be a much trickier deal to complete given the cross over between the two, although the eventual efficiencies could be greater than an AXIS – PartnerRe combination, it has been suggested.

There remains no clarity surrounding this M&A activity. Where there is confusion, the chance that someone, either a company involved or perhaps even yet another outsider to the deal, could come along and surprise everyone with an offer for one of the parties involved is always a possibility.

The process leaves all involved potentially more vulnerable and maybe more open to any enhanced offer that could help them to put this episode behind them more rapidly. All must be hoping for clarity and closure, particularly the shareholders at this stage.

For the full story see our previous articles, most recent first:

KBW analysts still give AXIS the edge to win PartnerRe deal.

Arch said to be considering AXIS Capital bid: Reports.

Analysts feel EXOR has improved chance of buying PartnerRe.

EXOR capital structure has no bearing on PartnerRe rating: S&P.

EXOR accuses PartnerRe board of “engineering” AXIS transaction.

PartnerRe Board urges Preferred Shareholders to vote for AXIS merger.

Bermuda court rules against Exor’s shareholder detail request.

PartnerRe shareholders should vote to go with AXIS: KBW analysts.

PartnerRe says Exor’s lawsuit claims “without merit”.

Exor sues to gain access to PartnerRe shareholder details.

PartnerRe-AXIS : $60m fees from third-party reinsurance capital by 2017.

EXOR welcomes PartnerRe shareholder vote, Sandell questions Board.

PartnerRe rejects EXOR again, to proceed with vote on AXIS merger.

EXOR says will engage with PartnerRe board, but not on price.

AXIS prepared to go it alone if PartnerRe deal breaks up.

PartnerRe board wants improved EXOR bid, or it’s back to AXIS.

AXIS unlikely to sweeten PartnerRe offer to match EXOR: Reuters.

Shareholders hold key to PartnerRe’s future, EXOR bid preferred.

EXOR increases offer for PartnerRe, becomes largest shareholder.

Exor to consider increasing bid for PartnerRe, reports.

AXIS, PartnerRe committed on merger. EXOR commits to its offer.

Major shareholder prefers EXOR’s bid for PartnerRe over AXIS’.

EXOR bids $6.4B for PartnerRe, to get into reinsurance.

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