AXIS Capital Agrees to Terminate Merger with PartnerRe and Receives $315

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”.

PartnerRe has agreed a $6.9bn sale to Italian investment vehicle Exor, ending a long-running and bitter M&A battle with Bermudian carrier Axis for the pure-play reinsurer.

This comes after the major proxy advisory firms ISS and Glass Lewis recommended that PartnerRe investors vote against the Axis deal. The Turin-based investment company, which is seeking to diversify beyond industrial holdings, highlighted that its offer was all-cash and filed proxy material to allow PartnerRe shareholders to vote against the Axis agreement.

The agreement requires the approval of PartnerRe shareholders at a special general meeting to be called “as soon as reasonably practicable”, Exor said.

Exor shares were up 0.2 percent by 1218 GMT, compared with a 0.7 percent rise in Milan’s blue-chip index .FTMIB.

PartnerRe will pay Axis Capital $315 million for terminating the agreement. PartnerRe previously rejected a $6.16 billion bid from Exor.

In an unusual show of determination for Exor Chief Executive John Elkann, scion of Fiat’s founding Agnelli family, the company sweetened its offer for the reinsurer several times since its original bid in April.

The deal is expected to close by the first quarter of 2016. The agreement includes a “go-shop” period in which the PartnerRe board can solicit competing offers until September 14.