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John Elkann’s Exor opens $6.7 billion acquisition talks with PartnerRe

Exor and Axis have been locked in a three-way battle for control of PartnerRe.

PORTA A PORTA

 

PartnerRe Ltd (PRE.N), the reinsurance company that has a $6.6 billion merger agreement with Axis Capital Holdings (AXS.N), is now willing to negotiate a new deal with rival suitor Exor SpA (EXOR.MI), according to people familiar with the matter told Reuters.

Business insurance reports that Exor and Axis have been locked in a three-way battle for control of PartnerRe. In January, Axis proposed an $11 billion merger to create the world’s purported fifth-largest reinsurer.

In April, Exor entered the fray with an all-cash, $130/share bid. Exor has since raised its offer to $140.50/share, while Axis and PartnerRe agreed to enhanced merger terms, including a preclosing dividend of $17.50/share.

So now, This would be the first time that PartnerRe negotiates a potential merger with Exor last initially offered in April.

Exor is Italian-based investment company controlled by (the Agnelli family) John Elkann. Exor is the controlling shareholder of Fiat Chrysler Automobiles, CNH Industrial (formed by the merger of Fiat Industrial and CNH) and of Cushman & Wakefield (the world’s largest privately held real estate services company).

Reuters says that the agreed merger of Axis and PartnerRe is scheduled to be voted upon by shareholders of both companies on Aug. 7.

If shareholders do not vote in favor of the merger between PartnerRe and Axis, the company that did not elect to merge would have to pay a $55 million fee to the other firm. If the side that voted “no” is purchased by another company within a year, that company would have to pay an additional $225 million to the jilted merger partner, Reuters reports.

If PartnerRe adopts a merger proposal other than the one agreed with Axis, PartnerRe would have to pay Axis $280 million plus up to $35 million in related expenses such as fees to lawyers and other advisers, Reuters adds.

Exor has said repeatedly that it would not go hostile by launching a tender offer for the PartnerRe shares.

 

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