Reports suggest that it is unlikely that insurance and reinsurance firm AXIS Capital will revise its merger offer and sweeten the deal further to combine with PartnerRe, despite EXOR’s improved all-cash bid.
EXOR, the Italian Agnelli family owned investment company, increased its offer to acquire Bermuda-headquartered reinsurance firm PartnerRe last week, while at the same time acquiring a large chunk of the reinsurance firm’s shares.
That put the ball back into AXIS Capital’s court, to increase its own offer, stick with the enhanced offer it had made including a special dividend, or to pull out of the deal completely. Meanwhile PartnerRe’s board are considering their response to the increased cash offer from EXOR.
Reuters reported last night that a source told its reporters that AXIS Capital would not look to sweeten the offer it has made for PartnerRe. AXIS remains convinced that its offer to combine the two firm’s provides greater shareholder value over the longer-term, given the re/insurance market environment right now.
The future of PartnerRe and this merger story lies in the hands of its shareholders, it seems, with the AXIS deal resulting in shareholders remaining with a holding of the combined firm, while EXOR’s would allow them to cash out at a premium right now.
If AXIS don’t come back with any improvement to the offer it seems likely that the recommendation from PartnerRe’s board over which way to turn could also be a key determinant in how this saga plays out.
Will the board be able to continue to recommend AXIS’ deal over EXOR’s cash offer and how would shareholders react if they do? We’ll update you when more news emerges.