Exor sues to gain access to PartnerRe shareholder details

Italian holding company and investor Exor has now sued reinsurance firm PartnerRe in the Supreme Court of Bermuda, as it seeks to gain access to details of shareholders in the reinsurer and states that PartnerRe has refused requests to date.

Reinsurance firm PartnerRe is the target of an acquisition by Exor, but is at the same time pursuing a merger with insurance and reinsurance compatriot AXIS Capital. Exor considers its cash offer superior to the merger terms and now wants to communicate with PartnerRe shareholders directly.

In an announcement today Exor said that it has filed a proxy statement with the SEC in opposition to what it terms “the proposed inferior merger transaction with AXIS Capital”. The PartnerRe board continues to recommend the AXIS deal, but Exor is adamant that its all-cash offer to buy out the shares of the reinsurer is the better deal.

With PartnerRe and AXIS Capital scheduled to hold shareholder votes on their merger on the 24th July, Exor wants to enter into direct communication with shareholders before hand to make its case. To date though, Exor claims that PartnerRe has refused to share the shareholder lists.

The lawsuit was filed in the Supreme Court of Bermuda on the 1st June, according to Exor, which says that the refusal to share details of shareholders reflects “the intention of PartnerRe’s Board to protect an inferior transaction with AXIS to the detriment of its shareholders, employees and clients.”

Exor says that PartnerRe’s shareholders “deserve the opportunity to evaluate the EXOR offer properly” and that the investor is committed to ensuring that shareholders get to exercise their rights, but are fully informed to do so.

Exor, itself the largest PartnerRe shareholder, has provided a document responding to a variety of claims made by PartnerRe’s board, as well as laying out what it sees as the benefits of its offer, over the combination with AXIS.

Update: PartnerRe has responded to Exor’s lawsuit filing.

Exor explains the benefits to the different parties:

Common shareholders:

• A 10% premium to the implied value of the AXIS transaction*
• Certainty of an all cash offer, with dividends paid until closing
• A speedy process expected to close by the end of 2015

Preferred shareholders:

• A financially robust PartnerRe with no change to its debt level and therefore no expected change to the current BBB rating of its preferred securities
• No change to their status – they remain part of a standalone PartnerRe with current terms, rights, listing and registration requirements all maintained
• The security of EXOR’s commitment to a capital distribution policy more conservative than both the previous practices of PartnerRe and the policy outlined in the AXIS transaction, with no special dividends or exceptional payouts
• A parent company with significant financial resources ($15 billion net asset value) and a conservative approach to leverage (Loan-To-Value to remain below 25% and to be reduced below 20% soon after completion of the transaction)

Employees:

• Significantly greater security since achieving savings through redundancies is not a feature of EXOR’s offer. There is no complicated integration process with EXOR.
• Continuity of senior management – PartnerRe will remain an independent company, operated by the same outstanding management team
• The opportunity to continue to grow PartnerRe as a standalone, leading, pure-play reinsurer, without the pressures of being a public company

An FAQ document explaining a number of other points can be found in the press release published today, here.

Exor says that its offer to acquire PartnerRe will remain valid until the 26th July, meaning that should PartnerRe’s shareholders vote not to combine with AXIS, the offer will still be available to them.

Allowing shareholders access to information in order to make an informed decision on the best route to follow seems the fair way forwards in this deal. In fact, perhaps shareholders should be allowed to make a direct, informed, choice, over the two deals, with the goal of settling the direction for PartnerRe sooner rather than later.

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

– 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.