Chubb says deal was “compelling”, but Hartford rejected it three times

Global primary insurance carrier and reinsurance company Chubb noted today that an acquisition of rival The Hartford would have been “compelling”, but The Hartford noted in its Q1 results that it actually turned the would-be purchaser down three times.

Chubb confirmed that it made a roughly $23.24 billion offer for rival the Hartford, offering $65 per share, on March 19th.

The Hartford then rejected that first acquisition offer the next week, saying that its Board concluded that the deal was not in the best interests of the company and its shareholders.

Today, in reporting its first-quarter 2021 results, which are detailed here on sister publication Reinsurance News, The Hartford explained that it actually rejected three offers from Chubb.

The first offer at $65 per share was followed up on March 30th by a letter from Chubb where the company said it would increase its offer to “in excess of $67 per share” if The Hartford would join it in “meaningful discussion and due diligence.”

A further offer was made, when Chubb sent another letter dated April 14th 2021, saying it was willing to increase its offer to “$70 per Hartford share,” which Chubb had also noted was “the top end of our range,” and would have been payable approximately 60% in cash and 40% in Chubb stock.

The Hartford said that its Board “unanimously rejected” both of these follow-up proposals, saying that it was not in the best interests of the company and its shareholders to enter into negotiations.

The Hartford’s board also reaffirmed its conviction on the company’s strategic business plan going forwards.

It’s interesting, as by broadcasting the offers it has turned down, The Hartford has perhaps signalled to any other potential suitors exactly where they need to be considering any bids made.

Prior to Chubbs’ offer, The Hartford’s share price sat around the $57 per share mark, but quickly jumped to $68 and peaked at $69 per share on March 25th.

It since fell to $65, but today jumped back up to $67 on the news from each company.

Which might suggest that The Hartford’s approach to how it dealt with the Chubb offers generated shareholder value. But it remains to be seen whether that value holds now Chubb has seemingly decided to walk away.

Insurance and reinsurance company Chubb said today that it believed the deal would have been “financially and strategically compelling for both sets of shareholders.”

Adding that however, “The Hartford has chosen not to engage in response to any of our proposals.”

“The path to a transaction would have been engagement coming from The Hartford on the terms of our last proposal,” Chubb said. “Although we are disappointed, we want to repeat that our shareholders demand of us, and we demand of ourselves, that we remain a disciplined acquiror.”

It remains to be seen if any other company makes an offer for The Hartford and seems likely to be successful they would have to go to $75 per share or higher.