mergers & acquisitions

The Endurance Specialty Holdings Ltd. and Montpelier Re insurance and reinsurance merger is getting nearer to completion, with the receipt of key shareholder approvals after votes undertaken by both of the firms.

Following on the heels of EXOR’s announcement yesterday that it was “expanding its legally binding guarantee for the transaction”, reinsurance firm PartnerRe responded saying that the modifications to its offer fail to address the risks.

Consolidation is once again in the news as it is announced that insurance and reinsurance broker Willis Group is to merge with global professional services firm Towers Watson, to create an $18 billion broking, advisory and professional services giant.

Italian investment holding company EXOR has announced that it is enhancing its all-cash offer for reinsurance firm PartnerRe by “expanding its legally binding guarantee for the transaction” which it says provides greater completion certainty.

EXOR, the Italian investment holding company of the Agnelli family, said today that it sees the response it has received from PartnerRe shareholders and analysts as positive, also accusing the PartnerRe board of engaging in an “irresponsible campaign” to mislead them.

The war of words in the reinsurance merger & acquisition battle between PartnerRe, its original suitor AXIS Capital and Italian investment and holding company EXOR continues, with PartnerRe’s board today citing the “unacceptable level of risk” associated with EXOR’s bid.

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.

The equity analysts who track the insurance and reinsurance sector are beginning to show a little divergence in their opinion of who will win the ongoing M&A tussle, with KBW’s analysts coming out in favour of AXIS Capital sealing its deal to amalgamate with PartnerRe.

The Financial Times has reported that Bermudian reinsurance firm Arch Capital Group is considering a $6.56 billion, $65 per share, bid for AXIS Capital, threatening to gate crash the M&A tussle that has been ongoing for the last few weeks.

After having met with members of EXOR’s management yesterday to gain clarification on the process and deal metrics for the proposed acquisition of reinsurance firm PartnerRe, Macquarie analysts now feel EXOR has an improved chance of sealing the deal.