EXOR Refuses to Sweeten $6.8 Billion Offer to Acquire PartnerRe

May 22, 2015 by Doni Bloomfield, Sonali Basak and Tommaso Ebhardt

EXOR SpA, the investment vehicle of Italy’s Agnelli family, reiterated that it won’t sweeten a $6.8 billion offer to buy PartnerRe Ltd. as the reinsurer demands a higher price to abandon a merger deal with AXIS Capital Holdings Ltd.

EXOR doesn’t see regulatory risk in the deal and is committed to obtaining approvals, the Turin, Italy-based company said Thursday in a statement. It offered to negotiate, but not on price, only “to provide PartnerRe shareholders with improved closing certainty.”

PartnerRe said it would engage in discussions with EXOR and is looking for a higher offer, according to a statement from the Bermuda-based company on Wednesday. A takeover would thwart the planned merger with AXIS, which was announced in January. EXOR has made two unsolicited bids to kill that deal, and said last week that its current offer, which values PartnerRe at $137.50 a share, was final.

“EXOR will not consider increasing the price of its binding offer or changing the deal-protection terms,” EXOR Chief Executive Officer John Elkann wrote in a letter to PartnerRe’s board. He urged PartnerRe to schedule a meeting of shareholders to vote on the offer.

The EXOR deal would give “more certainty to PartnerRe’s more than 1,000 employees whose morale has, no doubt, been negatively affected by the expected ‘redundancies’ contemplated in the existing AXIS transaction,” Elkann wrote.

AXIS said a merger would save costs and allow investors to benefit from a diversified insurer. Under its agreement, PartnerRe shareholders would be entitled to about 51.5 percent of a combined company. A revised AXIS deal, made after EXOR’s first bid in April, values PartnerRe at about $126 a share, based on Bermuda-based AXIS’ May 1 closing price of $52.33.

A deal with EXOR would result in a $280 million termination fee to AXIS. AXIS CEO Albert Benchimol said in a letter to employees on Wednesday that the company would do well even if the deal falters, and the fee would soften the blow.

EXOR is seeking to diversify beyond industrial companies such as Fiat Chrysler Automobiles NV. A PartnerRe takeover would be EXOR’s largest in more than a century.

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