PartnerRe Urges Vote For AXIS Amalgamation

June 18, 2015

Bermuda-based PartnerRe Ltd. yesterday [June 17] announced that its Board of Directors has sent a letter to shareholders in connection with the previously announced amalgamation with AXIS Capital.

“PartnerRe reaffirms its recommendation of the AXIS transaction and urges shareholders to vote for the amalgamation agreement with AXIS Capital ahead of the special meeting of PartnerRe shareholders, scheduled for July 24, 2015,” the company said.

The full text of the letter is as follows:

June 17, 2015

Your Vote Is Important – Vote The Enclosed White Proxy Card Today “For” Partnerre’s Merger With Axis Capital

Merger of Equals with AXIS Capital has Compelling Financial Rationale;
Will Create an Industry Powerhouse

EXOR’s Opportunistic Offer Significantly Undervalues PartnerRe

Do Not Be Misled by EXOR’s False Rhetoric

Dear PartnerRe Shareholder:

We are writing to you in advance of the Special Meeting of Shareholders to be held on July 24, 2015 to reiterate our recommendation that you cast your vote “for” the amalgamation agreement between PartnerRe and AXIS Capital on the white proxy card.

Our goal is to achieve the best outcome for PartnerRe and all of its shareholders. The Board conducted a rigorous and objective evaluation of PartnerRe’s path forward and examined a full range of strategic and financial alternatives. After this thorough process, it was clear that merging with AXIS Capital – a highly complementary strategic partner – is the most compelling opportunity to create superior long-term value for our shareholders at this time. This merger of equals was unanimously approved by the full PartnerRe Board of Directors after extensive review and evaluation.

The Merger with AXIS Capital Will Generate Significant Value for You

The combined company will be an industry powerhouse with increased scale and relevance. The company will have gross premiums written in excess of $10 billion, approximately $13 billion of combined shareholders’ equity, as well as cash and invested assets of more than $31 billion.

We believe the combination will result in double-digit earnings per share accretion and achieve a return on equity [“ROE”] of over 12%, with over 3.5% of ROE accretion by 2017. It will be one of the premier performing companies in insurance and reinsurance, with what we expect will have the highest ROE in our peer group.

What does this mean for you as shareholder?

The merger will significantly strengthen the company’s balance sheet and capital generation, and provide capital deployment flexibility, including immediately returning $750 million to shareholders of the combined companies following closing of the transaction, and an additional expected $2.2 billion of buybacks and dividends expected through 2017, equivalent to 100% of operating earnings. Furthermore, we have identified a clear path to deliver at least $200 million in identifiable and concrete cost synergies once the companies are fully integrated, generating even greater value over the long-term. In short, this combination will generate significant returns for you – and greater value than any other current opportunities.

EXOR’s Offer is Not a Viable Option and They Have Said Repeatedly That They Are Not Open to Negotiating on Price or Critical Terms

The proposal by EXOR to acquire PartnerRe at a price of $137.50 per share does not properly or adequately value PartnerRe, as it does not fully recognize the strength of our balance sheet and the value of the franchise and its future prospects. This price would essentially only approximate PartnerRe’s expected standalone book value at 2015 year-end. It does not come close to paying you the full, intrinsic value of your investment. The price is a non-starter.

Furthermore, EXOR has rejected our Board’s good faith offer to engage in discussions and has made it abundantly clear that it is not willing to adjust the price or terms of its offer. As we have noted previously, not only is the price inadequate, but the terms of the offer create significant and unacceptable levels of execution risk and are not in the best interests of our shareholders.

Finally, EXOR’s proposal on its current price and terms is not an actionable alternative to PartnerRe’s combination with AXIS Capital; a vote against the AXIS transaction is not a vote for a transaction with EXOR. The merger with AXIS Capital is the most compelling opportunity to create superior long-term value for PartnerRe shareholders.

Do Not Be Misled by EXOR’s False Rhetoric and Incorrect Assertions

PartnerRe and its Board have remained constructive in all its communications and have stayed focused on the important issues – price [value to its shareholders] and closing certainty [risk]. Given that EXOR can’t win on these fundamental points, it has resorted to communicating distorted facts and making misleading or outright false statements. But the facts are clear:

1. The full PartnerRe Board was actively involved and informed throughout the negotiations with AXIS Capital and unanimously approved the merger of equals after determining it is in the best interests of all shareholders. Further, the exchange ratio fairly reflected PartnerRe’s value at the time of signing.

As part of in-depth negotiations with AXIS Capital, PartnerRe agreed to an ownership split for PartnerRe and AXIS Capital shareholders based on each company’s relative tangible book value and market capitalization at the time.
2. PartnerRe and AXIS Capital’s Chairmen led the amalgamation negotiations to ensure the interests of the shareholders would not be harmed due to possible conflicts of interest.

In order to avoid the inherent conflicts of interest arising from CEOs negotiating a merger of equals – in which two CEO positions would be reduced to one – PartnerRe and AXIS Capital believed it was appropriate for the Chairman of the Board of each company to lead the negotiations.

3. A highly experienced and seasoned executive David Zwiener immediately stepped into the Interim CEO role once it was mutually agreed that Mr. Miranthis would resign at the signing of the AXIS transaction to allow him to pursue other opportunities.

Mr. Zwiener has deep knowledge of PartnerRe having served as a member of the Board since 2009. Previously, Mr. Zwiener was President and Chief Operating Officer of the property and casualty operations at Hartford Financial Services Group Inc., Managing Director and Co-Head of the financial institutions group of The Carlyle Group and Chief Financial Officer of Wachovia Corporation.

The full PartnerRe Board believed it was in their shareholders’ best interests to appoint Mr. Zwiener as Interim CEO to oversee the company’s operations through this critical period, especially in regard to business and integration planning.

4. The PartnerRe Board will have a continuing role in the combined entity as with any merger of equals,

Given the combination is structured as a merger of equals where the CEO came from one entity, it was a customary step to appoint a Chairman from the other entity.
The division of governance and leadership positions in the combined company reflects the extensive review by both companies’ Boards designed to ensure that the new leadership team was the best qualified to deliver superior long-term shareholder value.
Don’t Be Distracted By Exor’s Efforts To Mislead You Into Handing Over Control Of Your Company For A Price That Significantly Undervalues Your Investment — We Urge You To Vote “For” The Axis Capital Transaction Today

Simply stated, the merger of PartnerRe and AXIS Capital will create a stronger, more stable and better diversified company that will protect your investment and drive significant value for all shareholders. We strongly recommend that you vote in favor of the transaction today.

This is a critical time for all of PartnerRe’s shareholders – and the decision before you is an urgent one. Whether or not you plan to attend the Special Meeting of Shareholders, you have the opportunity to protect your investment by promptly voting the WHITE proxy card. We urge you to vote by telephone, by Internet, or by signing, dating and returning the enclosed WHITEproxy card in the postage-paid envelope provided.

We thank you for your continued support, and we look forward to continuing to deliver outstanding value to you in the future.


The Board of Directors of PartnerRe Ltd.

Your Vote Is Important, No Matter How Many Shares You Own.

If you have questions about how to vote your shares on the WHITE proxy card,or need additional assistance, please contact the firm
assisting us in the solicitation of proxies:

Innisfree M&A Incorporated
[877] 825-8971 [Toll-free from the U.S. and Canada]
+1-412-232-3651 [From other locations]

We urge you NOT to sign any Gold proxy card sent to you by EXOR.

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