The Board of insurer The Hartford has rejected the acquisition offer made recently by larger rival Chubb, saying that its Board concluded that the deal was not in the best interests of the company and its shareholders.
Last week, global primary insurance carrier and reinsurance company Chubb has confirmed that it made a roughly $23.24 billion offer for rival the Hartford, offering $65 per share.
The Hartford then confirmed that the unsolicited approach had been made, and said its Board of Directors were “carefully considering the proposal”, helped by financial and legal advisors.
The insurers Board of Directors also said that they were “committed to acting in the best interests of shareholders over the long term.”
Evan Greenberg’s Chubb also came out with a statement, confirming the approach was made.
Chubb said the offer it made was “strategically and financially compelling for both sets of shareholders and other constituencies.”
Chubb also said that, while it had not received a response to its proposal last week, it was “looking forward to constructive, private discussions in order to expeditiously consummate a fair transaction that benefits all of our respective stakeholders.”
However, after consideration, The Hartford has summarily rejected the offer, saying it isn’t in its best interest.
The Hartford has said today that after consultation with financial and legal advisors, its board “has unanimously rejected Chubb Limited’s March 11, 2021, unsolicited proposal to acquire The Hartford and determined that entering into discussions regarding a strategic transaction would not be in the best interests of the company and its shareholders.”
Which shows that this process has been ongoing for a little while, with the original offer submitted almost a fortnight ago.
The Hartford also said that its board “reaffirmed its commitment and resolve in the continued execution of The Hartford’s strategic business plan.”
Analysts have been opining on the deal in recent days and the consensus among them and our market sources seems to be that Chubb’s offer came in too low and perhaps now opens the door for competing offers from other rivals.
We’ve been polling the readership of our other publication Reinsurance News and while 25% of those responding said they thought the deal might get done at the offer amount made, 50% believed that Chubb will need to increase its bid in order to get The Hartford to agree to the acquisition.
Also read: Our recent analysis of Chubb’s third-party capitalised reinsurance joint-venture ABR Re.
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