Activist Sandell says PartnerRe board misinforming shareholders

Activist investor Sandell Asset Management has again come forwards to criticise the board of reinsurance firm PartnerRe, saying that it believes the board has been deliberately keeping the firms shareholders uninformed.

In a letter sent to Jean-Paul Montupet, Chairman of the Board of Directors of PartnerRe Ltd. today, Thomas E. Sandell, the Chief Executive Officer of activist investor Sandell Asset Management Corp. has again been openly critical of the board’s actions.

Back in May, Sandell questioned the PartnerRe’s board’s commitment to a fair process in assessing the all-cash offer from Italian investment holding company EXOR.

Sandell still believes that the PartnerRe board has not been enabling the shareholders of the reinsurance firm to make an informed selection, between the merger option with insurance and reinsurance specialist AXIS Capital or the buyout offer from EXOR.

In the letter, which is pasted below in full, Sandell accuses the board of PartnerRe of still not being committed to a fair process and questioning its corporate governance.

In particular the letter from Sandell raises the fact that the PartnerRe board has not handed over a full list of Preferred shareholders to EXOR so that the Italian investment firm can explain its offer to them. PartnerRe’s board had previously explained that it did not need to do this, but it has been questioned as to fairness by others.

Sandell says that his investment firm believes the board’s actions are because it is trying to protect the AXIS deal, whether in the best interest of shareholders or not.

The letter says that the boards’ conduct is “particularly outrageous” in light of the enhanced offer EXOR made this week.

The letter in full is below:

July 9^th, 2015

Mr. Jean-Paul Montupet
Chairman, Board of Directors
PartnerRe Ltd.
Wellesley House South
90 Pitts Bay Road
Pembroke HM08
Bermuda

cc: David Zwiener, Interim CEO

Dear Mr. Montupet,

As you know, we previously wrote to you, on May 13, 2015 and May 22, 2015, expressing our concern that, with respect to the EXOR offer, certain actions of the Board of PartnerRe Ltd. (the “PartnerRe”) did not appear to have been in the best interests of PartnerRe shareholders. We are writing today to express our continued concern that 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.

In particular, we believe that the Board’s decision to deny the customary request by EXOR to be provided with a list of PartnerRe Preferred Shareholders, in order to provide such holders with information about the EXOR offer, is unreasonable and frustrates the ability of Preferred Shareholders to fairly evaluate the AXIS transaction in comparison to the EXOR offer, and so denies them their right to vote on a fully-informed basis.

We believe that the Board is doing this in order to protect the AXIS transaction, in disregard of the shareholders’ best interests. We find this action egregious in today’s corporate environment of increased shareholder engagement, and to constitute an intentional failure to conform to current corporate best practices. This conduct is particularly outrageous in light of EXOR’s improved and superior offer which includes, among other things, a 100 basis point increase in dividends for PartnerRe Preferred Shareholders, call protection until 2021 and five years of capital distribution limits. We fail to understand how the Board’s refusal to disclose to EXOR the identity of PartnerRe’s Preferred Shareholders, so that EXOR could directly contact such holders in order to allow them to fairly consider the EXOR offer, is consistent with your fiduciary duties to such shareholders and the Board’s stated desire to maximize value for all shareholders. We strongly urge the Board to release this information to EXOR.

While we continue to understand the importance of maintaining a cordial relationship with AXIS, we would once again like to remind the Board that its first and foremost duty is to the Company’s shareholders, its true owners, who should be given the simple opportunity to fairly evaluate all legitimate strategic alternatives presented. Consistent with our own duties to our investors, we will not hesitate to exercise the rights available to us to hold the Board accountable. We look forward to a constructive dialogue and can be reached at 212-603-5700 at your convenience.

Yours sincerely,

Thomas E. Sandell
Chief Executive Officer
Sandell Asset Management Corp.

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

– 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.