PartnerRe Ltd. (PRE) to be Acquired by Exor SpA for $6.9 Billion

Shares of PartnerRe Ltd. (PRE) were trading up +2.74 or +2.02 percent to $138.70 per share in Monday’s premarket after news that the company had agreed to be bought by Italian firm, Exor SpA (EXOSF) in a deal valued at $6.9 billion. PartnerRe Ltd. stock closed at $135.96, up +0.33 or +0.24 percent in Friday's regular trading session.

Bermuda based PartnerRe Ltd. is a reinsurance company was founded in 1993 to take advantage of the void in catastrophe insurance capacitance after Hurricane Andrew caused difficulties for Lloyds of London.
The company began reinsuring property exclusively but has diversified into property-casualty and life reinsurance and currently covers agricultural, automobile, catastrophe, credit and surety, miscellaneous casualty, space and aviation, marine and life and health risks. The company writes multi line reinsurance on an excess of loss as well as on a pro-rata basis.

Turin, Italy based Exor SpA. is an investment company founded and controlled by the Agnelli family. Founded in 1927 as the Istituto Finanziario Italiano, by Giovanni Agnelli to manage his investments in Cinzano and Fiat, the company is currently the controlling shareholder of Fiat Chrysler Automobiles (FCAU), Cushman & Wakefield, the world's largest private real estate services company and CNH Industrial.

The deal, announced early this morning will have Exor SpA pay PartnerRe shareholders $137.50 per share in cash, as well as a special pre-closing dividend of $3 per share. Exor had originally made a $130 per share or $6.4 billion offer for PartnerRe in April of 2015.

PartnerRe's Chairman Jean-Paul Montupet said that, "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".

PartnerRe had agreed to merge with Axis Capital (AXS) to form a reinsurance company that would have been the largest in the world with a combined value of $11 billion; however proxy advisory companies recommended PartnerRe shareholders reject the deal with Axis in favor of Exor's bid.

Chairman Montupet added, "We are pleased to reach this agreement with Exor, which we believe is in the best interest of our shareholders. 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".

The deal includes a "go shop" clause, which permits PartnerRe to find a better offer until September 14th. Axis will receive $315 million from PartnerRe to terminate the tentative merger agreement and will reinstate its share buyback program. PartnerRe shareholders are scheduled to vote on the deal on August 7th.

PartnerRe stock is trading steady at the $138.50 level in this morning's premarket, indicating shareholders are on board with the deal. The transaction will end months of a bidding war as Exor made its first hostile bid in April after PartnerRe had already agreed to merge with Axis in January.

Other News About PRE


Company beat analysts by $0.04 per share but earnings were down year on year.

Proxy Mosaic Recommends PartnerRe Common and Preferred Shareholders Vote AGAINST AXIS Transaction

Advisor considers Exor's all cash offer superior over the merger agreement with Axis.

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Published on Aug 3, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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