mergers & acquisitions

Institutional Shareholder Services Inc (ISS), an influential proxy advisory firm, has now issued a recommendation on the proposed reinsurance merger of PartnerRe and AXIS Capital and has told shareholders they should vote against it.

With the spate of merger and acquisition (M&A) activity set to continue as companies look to offset the challenges of a softening reinsurance market, A.M. Best has stressed the importance of addressing the challenges faced by consolidating entities.

Reinsurance firm PartnerRe and re/insurer AXIS Capital continued to reaffirm their commitment to merge yesterday, highlighting what they deem a tax risk for preferred and common shareholders if they opted for the PartnerRe buyout offer from EXOR.

AXIS Capital, the insurance and reinsurance company seeking to merge with Bermudian reinsurer PartnerRe in the face of the bid from Italian investment firm EXOR, says the proposed merger is superior “immediately and in the future.” However AXIS has suspended all merger integration work.

The Board of reinsurance firm PartnerRe responded to the latest improved offer from Italian investment holding company EXOR, saying that it acknowledges that the offer is reasonably likely to result in a “Superior Proposal”, but added that it still prefers the planned merger with AXIS Capital.

The potential market gap left by the surge of merger and acquisition (M&A) activity in the global reinsurance sector presents opportunities for start-ups in Bermuda and other risk transfer domiciles, but some industry experts have questioned if bigger is actually better.

Italian investment holding company EXOR S.p.A. has again enhanced its offer for reinsurance firm PartnerRe, this time with a special dividend for common shareholders, as EXOR seeks to put the deal out of reach of the re/insurance merger transaction with AXIS Capital.

In a reinsurance sector loaded with traditional and alternative sources of capital and competition, the search for relevance is at the forefront of discussions, and the resulting merger and acquisition (M&A) activity looks set to change the fundamental operating environment of the sector.

The enhanced terms announced yesterday by reinsurance firm PartnerRe and insurer and reinsurer AXIS Capital continue to “weaken the thesis and rationale” behind the original merger announcement, according to analysts at Macquarie Research.

So here it is, reinsurance firm PartnerRe and insurer and reinsurer AXIS Capital have responded to EXOR’s enhanced offer for PartnerRe with an improved set of terms for their proposed merger agreement.