PartnerRe: Deserve Substantive, Factual Answers
PartnerRe Ltd. has urged shareholders attending EXOR’s presentation on its unsolicited offer to acquire PartnerRe to “demand substantive and factual answers to critical questions.”
“To date EXOR has either avoided answering important questions altogether or has provided misleading or incomplete responses to shareholders’ concerns,” PartnerRe said.
“Key questions relate to the inadequate value EXOR has placed on PartnerRe shares, the continued execution risks inherent in its offer, the negative impact on PartnerRe’s ratings and its preferred shares, and why EXOR did not engage with the PartnerRe Board in an attempt to resolve these issues.
“Shareholding directors from PartnerRe’s board sought to attend EXOR’s presentation, to which all shareholders were invited, but were denied entry. Accordingly, we urge PartnerRe shareholders to demand answers to key questions, particularly with respect to the following topics:
- Why should our shareholders be satisfied with a price which approximates economic book value and doesn’t compensate shareholders for earnings through closing? A transaction with EXOR won’t close until at least early 2016. Why is EXOR not willing to pay a fair price for PartnerRe that reflects current economic value, earnings prior to closing, and a customary control premium for PartnerRe’s strong franchise value?
- How do you reconcile your statement that you’re offering a full price with the fact that you have not conducted due diligence? Doesn’t this confirm that EXOR views $137.50 per common share as a cheap price for PartnerRe?
- Why isn’t EXOR following its own advice by investing in a basket of [re]insurance peers that yields 8%, given the over 8% return it has estimated it will make on its investment in PartnerRe? If EXOR truly believes that public markets can deliver similar returns over time to PartnerRe with more diversification and less risk, why is EXOR not taking its own advice and buying a basket of [re] insurance stocks? Are these return numbers truly credible?
- Why won’t the key controlling EXOR shareholders commit to making the necessary regulatory filings? By comparison, AXIS Capital is well known to PartnerRe’s insurance regulators and is well on the way to obtaining all necessary regulatory approvals.
- Why is EXOR unwilling to protect PartnerRe’s shareholders in the event EXOR cannot obtain all necessary regulatory approvals? Why is EXOR unwilling to compensate PartnerRe for its out-of-pocket loss of $315 million in termination fees as well as the lost upside of the AXIS transaction if EXOR cannot secure regulatory approvals?
- On what basis can EXOR claim that its acquisition of PartnerRe would not affect the ratings for preferred holders? Contrary to what EXOR would like shareholders to believe, S&P has not made any statement or affirmation regarding the ratings of PartnerRe’s preferred shares under potential EXOR ownership. Does EXOR really expect S&P, Moody’s, Fitch and A.M. Best not to factor in EXOR’s financial exposure to its portfolio of non-investment grade industrial companies when assessing risk to PartnerRe?
“The PartnerRe Board of Directors continues to urge its shareholders of both common and preferred shares to promptly use the white proxy card to vote FOR the Amalgamation Agreement with AXIS Capital at the Shareholder Meeting on July 24, 2015.
“Shareholders with questions about how to vote their shares may call Innisfree M&A Incorporated at [877] 825-8971 [toll-free from the U.S. and Canada] or +1-412-232-3651 [from other locations.]”
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.
