EXOR says PartnerRe & AXIS acknowledge transaction is inferior

By agreeing to evaluate the terms of the amalgamation deal and pushing the shareholder votes further back, reinsurance firms PartnerRe and AXIS Capital are acknowledging that their transaction is inferior, according to EXOR.

The Italian investment holding company controlled by the Agnelli family responded late Friday to the news that PartnerRe and AXIS would look into how they can improve the terms of their merger deal for the shareholders benefit.

That came on the heels of EXOR itself having improved its offer to buy reinsurance firm PartnerRe as it seeks to get shareholders on side to vote against the AXIS deal which would leave the way open for the firm to buy the reinsurer.

EXOR said late Friday that; “PartnerRe has acknowledged the superiority of EXOR’s Binding Offer by questioning the terms of its own amalgamation agreement with AXIS Capital.

“By postponing its own shareholder meeting, PartnerRe continues its attempts to rescue an inferior transaction that is the result of a flawed process.”

EXOR said that it remains committed to “bringing its offer to fruition for the benefit of all PartnerRe shareholders.”

In the face of the enhanced offer from EXOR there is little that PartnerRe and AXIS could do other than to seek to enhance their own deal terms.

Where any enhancements come from could be telling, as some investors will not appreciate further disbursements of capital in the form of dividends or one-offs, preferring to see the firms ready to invest for the future. That leaves few other options for sweetening the terms it would seem.

However, with the latest filings showing that hedge funds and other institutions now own around 86% of the PartnerRe stock, an attractive additional disbursement combined with a conversion into the amalgamated company shares could get some of these investors onside.

With the shareholder votes now pushed back to the 7th August the reinsurance firms have some time to make their offer more compelling. If they sweeten the deal significantly it will be interesting to see whether EXOR is prepared to go any further.

There must be limits to all parties appetites to continue sweetening the deal and it will be interesting to see which side reaches the limits first.

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

– PartnerRe and AXIS Capital evaluate improving merger deal.

– As EXOR pursues PartnerRe, AXIS could attract buyer: Macquarie.

– Activist Sandell says PartnerRe board misinforming shareholders.

– AXIS needs to match, or beat, EXOR’s improved PartnerRe offer.

– EXOR enhances deal terms for PartnerRe shareholders.

– PartnerRe unimpressed with EXOR’s expanded completion guarantee.

– EXOR sweetens PartnerRe offer with completion guarantee.

– EXOR says receiving positive response from PartnerRe shareholders, plus updates from both sides.

– PartnerRe cites inadequate price, unacceptable risk of EXOR offer.

– Confusion over whether Arch is bidding for AXIS, or not.

– 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.