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.
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