AXIS Deal Cancelled, EXOR To Buy PartnerRe

August 3, 2015

Bermuda-based AXIS Capital Holdings Limited today [Aug 3] announced that it has accepted a request from PartnerRe Ltd. to terminate the amalgamation agreement with AXIS Capital, as PartnerRe Ltd. has reached a definitive agreement with EXOR buy PartnerRe for $6.9 billion.

PartnerRe will pay AXIS Capital a $315 million fee to immediately terminate the amalgamation agreement, which was originally entered into by both companies on January 25, 2015.

Michael A. Butt, Chairman of the AXIS Capital Board of Directors, said, “Prior to PartnerRe reaching out to us last December to discuss a combination of our companies, we were confident in continuing with our strategy as a stand-alone company, building our three strong businesses incrementally.

“We will now proceed with that strategy, with strengthened resolve. We have been very conscious of our responsibilities to our shareholders throughout these negotiations and believe we have demonstrated prudence and financial discipline in our approach.”

Albert Benchimol, President and CEO of AXIS Capital, said, “Our proposed transaction with PartnerRe stood to create a powerful mix of two financially strong and independent companies with compelling insurance/reinsurance franchises.

“While I am disappointed that the merger will not proceed, I have no doubt that the best days for AXIS Capital, our employees, clients, brokers and shareholders lie ahead. We have built a powerful global platform on which to continue to advance our hybrid insurance model with three diversified businesses in specialty insurance, reinsurance, and accident and health.”

Mr. Benchimol added, “We are prepared to move ahead with our fiscally disciplined growth strategy and a commitment to return excess capital to shareholders in the form of dividends and stock repurchases. Since becoming a public company, we have repurchased approximately 92.8 million shares of AXIS Capital stock for a total of $3.3 billion.

“As we go forward independently, I would like to thank our employees for their diligent efforts throughout the integration planning meetings that took place over the past several months, and for their ongoing focus on the business-of-the-business. We have learned a great deal from this process, and we intend to apply what we have learned to make AXIS Capital a better company in the months and years ahead.”

EXOR will acquire all of the outstanding common shares of PartnerRe for an all-cash consideration of $140.50 per share, including a special pre-closing dividend of $3.00 per share, for a total transaction value of approximately $6.9 billion. The agreement is not subject to due diligence and is not conditioned on financing.

PartnerRe Chairman Jean-Paul Montupet stated, “We are pleased to reach this agreement with EXOR, which we believe is in the best interest of our shareholders. Since EXOR made its initial offer to acquire the Company in April, 2015, the PartnerRe Board has been focused on maximizing value for our shareholders while positioning PartnerRe for long-term success.

“We have carefully and thoroughly evaluated each development over the past several months, and believe that this thoughtful and deliberate approach was critical to delivering a transaction that represents a significant improvement in the price and terms of EXOR’s original proposal.

“Importantly, EXOR is committed to ensuring that the unique culture, brand and business that our dedicated employees have successfully built over the past 20 years remain intact.”

The agreement with EXOR includes a “go-shop” period, during which the PartnerRe Board will actively solicit and evaluate any competing offers and is permitted to enter into negotiations related to any proposals received prior to September 14, 2015, in each case subject to customary restrictions. There can be no assurance that this process will result in a superior proposal, the company added.

PartnerRe headquarters will continue to be located in Bermuda.

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Comments (10)

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  1. Onion juice says:

    And I’m pleading with my boss for more hours so I can pay my rent.

    • Zevon says:

      Maybe you should waste less time posting stupid comments.

  2. not-the-umum-Chris-Famous-show says:

    In terms of jobs, this has to be good news. However, as it stands it also leaves PartnerRe as a small fish as all around them buy or merge so I cannot see Exor leaving PartnerRe as it is now – more uncertainty for the staff?

  3. Vote for Me says:

    Whilst the outcome is a bit surprising given the initial definitive amalgamtion agreement between Axis and Partner Re, it probably bodes well since there is likely to be less job losses.

    This process laso demonstrates that a deal is not a deal until the ink really dries. We are mindful of the $350 penaly that will now be paid to Axis from Partner Re. The penalty alose shows the strength of the original amalgamation.

    • Jeremy Deacon says:

      Think it was $250m – small change to Exor

      • hmmm says:

        It says $315m in the article.

      • James says:

        Not small change. Look at how AXIS stock price is affected by the break-up fee.

  4. navin johnson says:

    Say goodbye to the Partner Re directors who fought so hard to accept an inferior bid

  5. Sanity pls... says:

    IB being a major pillar of the Bermudian economy, I find it surprising the lack of discussion in Bermuda as to the significance and the impact of this “fight” for PartnerRe. The announcement made today makes me very happy as it means many here in Bermuda will NOT be losing their jobs. Let’s hope Exor follows through on their plans to grow PartnerRe vs gut the company.

  6. Bermuda123 says:

    This is good news for the Bermuda job market and hopefully for Partner Re overall as they move forward into the future with an independent (.from the industry) owner. However a lesson in corporate governance I think.