Italy's Exor To Buy PartnerRe In $6.9 Bln Cash Deal; Axis Deal Terminated

(RTTNews) - Reinsurer PartnerRe Ltd. (PRE) agreed Monday to be acquired by Italian investment firm Exor S.p.A (EXOSF) in an all-cash deal of $140.50 per share, including a special pre-closing dividend of $3.00 per share, for a total transaction value of about $6.9 billion.

Exor, which is controlled by the Agnelli family, is one of Europe's leading listed investment companies and the largest shareholder of PartnerRe. Exor is also the controlling shareholder of Italian automaker Fiat Chrysler Automobiles N.V. (FCAU).

"Today's agreement is very positive for PartnerRe and EXOR. Under our stable and committed ownership, PartnerRe will continue to develop as a leading independent global reinsurer," Exor Chairman and CEO John Elkann said.

The offer price of $140.50 per share represents an 18 percent premium over PartnerRe's closing price of $119.14 on April 13, the date prior to the launch of the Exor's initial offer. It also represents a 3.3 percent premium over PartnerRe's closing price of $135.96 on Friday.

Under the terms of the deal, PartnerRe preferred shareholders will also receive the enhancements announced on July 20, 2015.

Bermuda-based PartnerRe said its Board has carefully analyzed the challenges facing the reinsurance industry over the past three years and actively considered various strategic options and a range of potential transactions. The offer price also represents a 23 percent premium over PartnerRe's last unaffected stock price as of January 23, 2015.

It then led to the amalgamation agreement announced on January 25, 2015 with Axis Capital Holdings Limited (AXS). Since then, and following Exor's initial proposal in April, the PartnerRe Board has managed to negotiate significant enhancements to Exor's initial proposal.

In January, Axis Capital and PartnerRe agreed to a near $11 billion merger to create one of the world's largest reinsurers. The deal was expected to close in the second half of 2015.

The Exor-PartnerRe deal was struck after mutual decision of PartnerRe and Axis Capital to terminate their amalgamation agreement, with PartnerRe agreeing to pat a termination fee of $315 million to Axis Capital.

The Exor-PartnerRe deal was negotiated to include a partial reimbursement of the Axis Capital termination fees of $225 million if Exor fails to obtain required transaction approvals within one year following signing or if there are certain non-appealable legal prohibitions to closing.

The deal, which has the unanimous approval of the the Boards of Directors of both PartnerRe and Exor, is expected to close in the first quarter of 2016, primarily subject to approval by PartnerRe shareholders and regulatory clearances. However, the deal is not subject to due diligence and is not conditioned on financing.

The terms of the Exor-PartnerRe deal also include a "go-shop" period, during which the PartnerRe Board will actively solicit and evaluate any superior offers and is permitted to enter into negotiations related to any proposals received prior to September 14, 2015.

Following the closure of the deal, PartnerRe headquarters will continue to be located in Bermuda, and it will have a strategic presence on five continents in 39 distinct geographic locations worldwide.

Credit Suisse and Lazard are acting as co-financial advisors and Davis Polk & Wardwell LLP and Appleby Global Services Limited are acting as legal counsel to PartnerRe.

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."