Sandell Asset: “Best Interests Of Shareholders”

May 24, 2015

The AXIS/EXOR/PartnerRe business matter continues, with Sandell Asset Management Corp issuing a public letter to the Chairman of PartnerRe Board expressing concern “that, with respect to the EXOR offer, certain actions of the Board of PartnerRe Ltd. did not appear to have been in the best interests of PartnerRe shareholders.”

“While we understand the importance of maintaining a cordial relationship with Axis, we would once again like to remind the Board that its first and foremost duty is to the Company’s shareholders, its true owners,” the letter stated.

In January 2015, Bermuda-based PartnerRe announced they had signed a “definitive amalgamation agreement” with AXIS Capital Holdings, and in April 2015 EXOR made their own offer to acquire PartnerRe for $6.4 billion, and the parties have been exchanging words since then.

The full letter follows below:

22 May 2015

Mr. Jean-Paul Montupet
Chairman, Board of Directors
PartnerRe Ltd.
Wellesley House South
90 Pitts Bay Road
Pembroke HM08
Bermuda

cc: David Zwiener, Interim CEO

By Email and By Courier

Dear Mr. Montupet,

As you know, we previously wrote to you, on May 13, 2015, expressing our concern that, with respect to the EXOR offer, certain actions of the Board of PartnerRe Ltd. (the “Company”) did not appear to have been in the best interests of PartnerRe shareholders. Subsequent disclosures made by the Company have provided some assurances regarding our concerns, but the continued refusal to designate the EXOR offer as reasonably likely to result in a “Superior Proposal” raises significant questions about the Board’s commitment to a fair process.

As we stated in our letter, and in our subsequent conversation with Mr. Zweiner, in our view, there is ample evidence that the latest EXOR offer from May 12 “would reasonably be likely to result in a Superior Proposal” under the merger agreement with Axis. We believe that PartnerRe should immediately and publicly acknowledge this, and follow the process outlined in Section 5.8 of the merger agreement with Axis – a process which was specifically negotiated by PartnerRe. Based on our understanding of the Axis merger agreement, such a determination would not jeopardize the potential merger with Axis. Rather, the Board would be free to negotiate with EXOR before determining, in good faith, whether to change its recommendation, while simultaneously initiating a process that would permit Axis to improve its offer. We fail to understand how the Board’s decision to ignore the merger agreement’s fair and well-defined provisions that specifically contemplate the Company’s current scenario is consistent with the Board’s stated desire to maximize value for all shareholders.

While we understand the importance of maintaining a cordial relationship with Axis, we would once again like to remind the Board that its first and foremost duty is to the Company’s shareholders, its true owners. Consistent with our own duties to our investors, we will not hesitate to exercise the rights available to us to hold the Board accountable. We look forward to a constructive dialogue and can be reached at 212-603-5700 at your convenience.

Yours sincerely,

Thomas E. Sandell
Chief Executive Officer
Sandell Asset Management Corp.

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Comments (3)

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  1. King Jammys says:

    The Lawyers cannot wait!!!!!!

  2. Navin Johnson says:

    Sometimes difficult for Boards to back peddle if they want to undo a deal…..even if it is a better deal such as the one Exor is making