EXOR S.p.A. (“EXOR”; EXO.IM), one of Europe’s leading listed
investment companies and the largest shareholder of PartnerRe Ltd.
(“PartnerRe”; NYSE:PRE), today further enhanced its superior offer
for PartnerRe by expanding its legally binding guarantee for the
transaction.
EXOR S.p.A., the public company with a net asset value of
approximately $15 billion has, since it announced its offer, always
been a guarantor of the payment obligations under the EXOR Merger
Agreement and is now also guaranteeing all the contractual
commitments in the Merger Agreement. For PartnerRe shareholders,
this means that the proposed Merger Agreement to be entered into
with EXOR N.V., a holding company formed in 2013 and already
capitalized with € 300 million of available cash, is now backed by
the balance sheet of parent company EXOR S.p.A. The expanded
guarantee underpins EXOR’s commitment to satisfying all of the
contractual terms of the EXOR parties, including in relation to
obtaining regulatory approvals. This enhancement underscores EXOR’s
previous commitment to provide even greater certainty of closing
following its on-going, constructive conversations with PartnerRe’s
shareholders.
EXOR’s $137.50 per share all-cash offer is superior by all
significant measures and today’s step further empowers PartnerRe
shareholders to reject the AXIS transaction. PartnerRe shareholders
can be confident to vote “AGAINST” the AXIS deal and ask the
PartnerRe Board to engage with EXOR and accept its binding
offer.
EXOR has today provided the PartnerRe board with an amended
binding Merger Agreement that incorporates the additional
guarantee.
EXOR’s offer contains:
- No execution risk – EXOR’s offer
is binding, fully financed and requires no due diligence. EXOR
ranked #24 in the Fortune Global 500 in 2014, and has over a
century of experience in investing in, undertaking and completing
complex transactions. EXOR’s investment grade rating has been
affirmed by Standard & Poor’s after the submission of its offer
for PartnerRe. Unlike AXIS, EXOR does not have a walkaway right if
material losses lead to a ratings downgrade of PartnerRe.
- Same regulatory provisions – The
EXOR agreement contains the exact same regulatory covenant as in
the AXIS agreement. In addition, EXOR believes its ownership will
be positively viewed by regulators and rating agencies because
PartnerRe will have continuity of business, strategy, management,
employees and brand as well as a more conservative capital
structure as compared to both historical PartnerRe and pro-forma
PartnerRe-AXIS. EXOR is also a seasoned owner of regulated
financial services businesses around the world, including in the
insurance industry.
- Clear commitment and path to
closing – the EXOR listed company guarantees all the
contractual terms in the PartnerRe transaction, including in
relation to obtaining regulatory approval. EXOR has also backed its
offer by investing more than $600 million in PartnerRe, the maximum
allowable under PartnerRe’s bye-laws. As PartnerRe’s largest
shareholder, EXOR is therefore more incentivized than any other
stakeholder to complete the transaction with PartnerRe this
year.
The attached FAQ provides additional details about the
transaction certainty provided by EXOR’s binding offer.
PartnerRe shareholders seeking clarity on the EXOR offer can
contact EXOR’s proxy solicitor, Okapi Partners LLC, at
info@okapipartners.com or toll free at (877) 796-5274 (banks and
brokerage firms should call +1 (212) 297-0720). Information about
EXOR’s offer and access to proxy materials are also available at
www.exor-partnerre.com.
EXOR is soliciting common and preferred shareholders to vote
AGAINST the proposed AXIS transaction at the upcoming Special
General Meeting of PartnerRe shareholders to be held on July 24,
2015. This will enable PartnerRe to accept EXOR’s superior
offer.
EXOR therefore continues to urge PartnerRe shareholders to vote
the GOLD proxy card
AGAINST all three proposals
related to the AXIS transaction and asks shareholders not to sign
or return any WHITE proxy cards they receive from PartnerRe.
Shareholders have already returned a WHITE proxy card, can change
their vote by simply returning the GOLD proxy card.
FAQ: EXOR’S BINDING
OFFER – TRANSACTION CERTAINTY
Set forth below are certain Frequently Asked Questions
concerning the proxy statement filed with the United States
Securities and Exchange Commission (“SEC”) on Schedule 14A by EXOR
S.p.A. (the “Proxy Statement”) with regard to a solicitation of
proxies to vote “AGAINST” certain proposals that are described in
the proxy statement/prospectus (“PartnerRe/AXIS Proxy
Statement/Prospectus”) contained in the Registration Statement on
Form S-4 filed by PartnerRe Ltd. (“PartnerRe”). Capitalized terms
used below and not otherwise defined herein shall have the meanings
ascribed thereto in the Proxy Statement.
Question #1. What changes did EXOR make to the EXOR Merger
Agreement (the “EXOR Agreement”)?
Answer. EXOR further enhanced its superior offer for PartnerRe
by expanding its legally binding guarantee for the transaction to
include, not only payment obligations, but also all the contractual
commitments in its Merger Agreement. Thereby EXOR listed company
guarantees all the contractual terms in the PartnerRe transaction,
including the ones related to obtaining regulatory approval, and
ensures even greater certainty for PartnerRe shareholders. This
enhancement underscores EXOR’s previous commitment to provide such
certainty of closing following its on-going, constructive
conversations with PartnerRe’s shareholders.
Question #2. How does the EXOR Merger Agreement compare with
the Amalgamation between AXIS and PartnerRe?
Answer. The EXOR Merger Agreement is superior. The claims of
PartnerRe about the uncertainties in the EXOR transaction are
meritless and are an attempt to mislead its shareholders. Here are
the facts:
- EXOR’s all-cash offer of $137.50 is a
superior price for common shareholders. Additionally, given the
fact that the AXIS transaction contains predominantly stock
consideration, there is significant uncertainty about the trading
value of a combined AXIS-PRE entity.
- The contractual terms in the EXOR
Agreement are better for PartnerRe than the AXIS Amalgamation
Agreement (the “AXIS Agreement”).
- The agreement EXOR proposed was the
same as the AXIS Agreement (other than technical changes that
account for the cash nature of the EXOR transaction versus the
predominantly stock consideration in the AXIS deal), except for the
following improvements:a. The AXIS Agreement contains a condition
to closing allowing either side to walk away from the deal on
certain ratings downgrades from the rating agency, A.M. Best. A
ratings downgrade could, for example, occur from catastrophic
losses arising from hurricanes or other events. The EXOR Agreement
has no such walk away right for EXOR on a ratings downgrade from
A.M. Best. EXOR has assumed the risk of any ratings downgrade.b.
Following the EXOR offer of $137.50 on May 12, 2015, PartnerRe and
AXIS amended the AXIS Agreement to make it more difficult for a
third party like EXOR to consummate a transaction. PartnerRe raised
the breakup fee from $250 million to $280 million. PartnerRe also
made the definition of a Superior Proposal that the board could
consider more narrow, which was designed to give the board more
room to resist a third party offer. EXOR did not increase the
breakup fee proposed in its merger agreement or revise the
definition of Superior Proposal to mirror the revised AXIS terms,
as EXOR does not believe it is in the best interests of PartnerRe’s
shareholders to impose contractual terms that are intended to
preclude third party offers. As a result, in this important respect
the terms of the EXOR Agreement are superior to the AXIS
Agreement.
- EXOR S.p.A., the public company with
approximately $15 billion of net asset value has, from the
beginning, always guaranteed the payment obligations of the EXOR
parties under the EXOR Agreement. EXOR previously stated in its
letter to PartnerRe’s Board on May 21, 2015 that it was willing to
negotiate with PartnerRe to provide PartnerRe shareholders with
improved closing certainty. To date, the Transaction Committee of
PartnerRe’s Board has refused to negotiate with EXOR in good faith,
but EXOR remains committed to the transaction. In order to confirm for shareholders the assurance they
rightly deserve that EXOR will be there to close this transaction,
EXOR has expanded the guarantee provided by EXOR S.p.A. to include
the performance obligations of the other EXOR parties in the merger
agreement. This means that EXOR S.p.A. is putting the full faith
and credit of its balance sheet behind satisfaction of all
contractual obligations.
Question #3. PartnerRe claims that the EXOR merger parties
are shell companies and that EXOR could walk away with minimal
risk. Is that true?
Answer. This is simply not correct. One of the EXOR parties to
the EXOR Agreement, EXOR N.V., has been capitalized with 300
million Euros since 2013, long before EXOR commenced merger
discussions in April of 2015. EXOR N.V.’s balance sheet was
publicly available, and would have been readily provided, had
PartnerRe chosen to look or ask for it. Additionally, EXOR has
demonstrated its commitment to PartnerRe by investing more than
$600 million in PartnerRe common stock, becoming its largest
shareholder with 9.9% of the common shares. That’s approximately a
$1 billion commitment to PartnerRe already.
Therefore there has never been a “free walkaway right” and the
EXOR parties are not shell companies. Additionally, EXOR S.p.A.,
the public company with approximately $15 billion of net asset
value has always been a guarantor of the financial obligations
under the EXOR Agreement and has now become obligated to perform
the covenants as well, including the satisfaction of all conditions
to closing.
Question #4. PartnerRe says EXOR “refuses to offer an
appropriate reverse termination fee.” Why won’t EXOR agree to
this?
Answer. EXOR listed company guarantees all contractual terms,
including the ones related to obtaining regulatory approval, and
provides stronger commitment and greater certainty to closing than
a capped obligation under a reverse termination fee. This is
because EXOR has full confidence that it will be able to obtain
regulatory approvals for the transaction. It currently owns
regulated financial services businesses around the world and
expects that its proposal for a better capitalized PartnerRe, along
with its stated plans to retain PartnerRe’s talented employees,
will be welcomed by regulators. Additionally, as EXOR does not
compete with PartnerRe there are no substantive antitrust issues
that could threaten the transaction.
Despite PartnerRe’s statements that a reverse termination fee is
“customary” for a failure to obtain regulatory approvals, here are
the facts:
- The covenants to obtain regulatory
clearance in the EXOR Agreement ARE
EXACTLY THE SAME as those in the AXIS Agreement, which
requires that each party uses its “reasonable best efforts” to
obtain such approvals. This is a very high legal standard, and
ensures that both parties are contractually committed to completing
the transaction. However, the key difference between these
transactions is that the guaranteeing party in the EXOR Agreement
has approximately $15 billion in net assets, nearly 3 times the
size and financial strength of AXIS.
- Notably, there is no reverse
termination fee in the AXIS Amalgamation Agreement. PartnerRe is
asking something of EXOR that it did not obtain (and based upon
PartnerRe’s S-4, does not appear to have even sought) from
AXIS.
- PartnerRe cites the following examples
of merger transactions that have reverse termination fees:
a. Google/Motorola
b. Seagate/Maxtor
c. AT&T T-Mobile
d. Nielsen/Arbitron
e. Microsoft/aQuantative
None of these are insurance company transactions and they are
irrelevant to the PartnerRe transaction. PartnerRe has obviously
been unable to locate a single comparable property & casualty
or life and annuity, insurance or reinsurance transaction that has
a reverse termination fee for regulatory reasons. There’s a reason
for this. Using publicly available information, EXOR has not
identified a single such insurance M&A transaction with a value
in excess of $1 billion in the last 10 years with a reverse
termination fee for regulatory reasons.1 The PartnerRe claim
that an “appropriate” reverse termination fee should be included in
the agreement is unwarranted and misleading. There are many good
reasons that reverse termination fees are not found in insurance
deals, and PartnerRe itself did not agree to such a provision in
its acquisition of Paris Re in 2009.
The bottom line is that EXOR has the same regulatory obligations
that AXIS has, with an uncapped obligation and three times more
assets standing behind it than AXIS does.
Question #5. PartnerRe says EXOR refused to negotiate. Is
that true?
Answer. This is not true. As has been publicly stated on
numerous occasions, EXOR’s financial and legal advisors
participated in meetings and extensive conversations with
PartnerRe’s financial and legal counsel. The
process PartnerRe followed was not a negotiation. It was a process
designed to coax the best terms out of EXOR so they could be
matched by AXIS. There was no attempt to follow the rules
provided in the AXIS Agreement or to enter into good faith
negotiations. In a letter to PartnerRe’s Board on May 21, 2015, Mr.
John Elkann, Chairman of EXOR asked the PartnerRe Board to use its
own agreement, declare that the EXOR transaction was “reasonably
likely to be superior” and to enter into good faith negotiations.
If not, then the shareholders of PartnerRe should be permitted to
decide. PartnerRe chose not to negotiate, so the shareholders will
have a chance to decide the matter at the PartnerRe shareholders
meeting on July 24, 2015.
The package of proposals EXOR has provided create certainty
regarding EXOR’s commitment and ability to close the transaction.
EXOR remains committed to the transaction and is still open to
negotiate the terms it previously proposed, as amended today.
ABOUT EXOR
EXOR is one of Europe’s leading investment companies and is
controlled by the Agnelli family. It is listed on the Milan Stock
Exchange and has a market capitalization of approximately $12
billion and a net asset value of approximately $15 billion. For
over a century EXOR has made successful investments, including more
recently the acquisition of Chrysler by Fiat, creating the world’s
seventh largest car producer (“FCA”) with a $20 billion market
capitalization.
EXOR focuses on long-term investments in profitable global
companies, primarily in Europe and the United States, that benefit
from its strong permanent capital base. In addition to FCA, its
principal investments include CNH Industrial, the fourth largest
global capital goods company (with a $12 billion market
capitalization), and Cushman & Wakefield, the world’s largest
private commercial real estate services company.
FORWARD-LOOKING STATEMENTS
Certain statements and information contained in this
communication that are not statements or information of historical
fact constitute forward-looking statements, notwithstanding that
such statements are not specifically identified as such. These
statements may include terminology such as “may”, “will”, “expect”,
“could”, “should”, “intend”, “commit”, “estimate”, “anticipate”,
“believe”, “remain”, “on track”, “design”, “target”, “objective”,
“goal”, “forecast”, “projection”, “outlook”, “prospects”, “plan”,
“intend”, or similar terminology, including by way of example and
without limitation plans, intentions and expectations regarding the
proposal to acquire PartnerRe, the financing of a potential
transaction, and the anticipated results, benefits, synergies,
earnings accretion, costs, timing and other expectations of the
benefits of a potential transaction. Forward-looking statements are
related to future, not past, events and are not guarantees of
future performance. These statements are based on current
expectations and projections about future events and, by their
nature, address matters that are, to different degrees, uncertain
and are subject to inherent risks and uncertainties. They relate to
events and depend on circumstances that may or may not occur or
exist in the future, and, as such, undue reliance should not be
placed on them. Actual results may differ materially from those
expressed in such statements as a result of a variety of factors,
including changes in general economic, financial and market
conditions and other changes in business conditions, changes in
commodity prices, the level of demand and financial performance of
the major industries our portfolio companies serve, changes in
regulations and institutional framework (in each case, in Italy or
abroad), and many other factors, most of which are outside of the
control of EXOR. EXOR expressly disclaims and does not assume any
liability in connection with any inaccuracies in any of these
forward-looking statements or in connection with any use by any
party of such forward-looking statements. Any forward-looking
statements contained in this communication speaks only as of the
date of this communication. EXOR undertakes no obligation to update
or revise its outlook or forward-looking statements, whether as a
result of new developments or otherwise. Names, organizations and
company names referred to may be the trademarks of their respective
owners. This communication does not represent investment advice
neither a solicitation, nor a recommendation nor an invitation, nor
an offer for the purchase or sale of financial products and/or of
any kind of financial services as contemplated by the laws in any
country or state.
IMPORTANT INFORMATION FOR INVESTORS AND SHAREHOLDERS
This communication does not constitute an offer to buy or sell
or the solicitation of an offer to buy or sell any securities. EXOR
has filed a proxy statement (the “Proxy Statement”) with the United
States Securities and Exchange Commission (the “SEC”) in connection
with the upcoming special meeting of the shareholders of PartnerRe
at which the PartnerRe shareholders will consider certain proposals
regarding the proposed transaction with AXIS (the “Special Meeting
Proposals”). This material is not a substitute for the Proxy
Statement that EXOR has filed with the SEC or any other documents
which EXOR may send to its or PartnerRe’s shareholders in
connection with the proposed transaction. INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER
RELEVANT DOCUMENTS IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY
CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. All such documents, when filed, are available free of
charge at the SEC’s website (www.sec.gov) or by directing a request
to EXOR through the investor contacts listed above.
PARTICIPANTS IN THE SOLICITATION
EXOR and its directors, executive officers and other employees
may be deemed to be participants in any solicitation of
shareholders in connection with the Special Meeting Proposals.
Information regarding EXOR’s directors and executive officers is
available in EXOR’s public announcements and filings with the SEC,
Consob and the Borsa Italiana, which can also be found at
www.exor.com. Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, is available in the
Proxy Statement.
1 Sources: MergerMetrics and Deal Point Data
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150629005707/en/
Investors:EXOR Investor RelationsFabiola Portoso+39 011
509 0345ir@exor.comorOkapi PartnersBruce H. Goldfarb / Pat McHugh /
Jon Einsidler / Lydia Mulykinfo@okapipartners.comOkapi Partners LLC
is assisting EXOR with its efforts to solicit proxies. PartnerRe
shareholders who have questions about voting their shares should
call Okapi Partners LLC toll free at (877) 796-5274 (banks and
brokerage firms should call +1 (212) 297-0720).orMedia:EXOR
Media RelationsAndrea Griva+39 011 509
0318media@exor.comorStockWell CommunicationsPhilip Gawith / Richard
Holloway / Laura Gilbert+44 20 7240
2486exor@stockwellgroup.comorAbernathy MacGregorTom Johnson / Mike
Pascale / Allyson Vento+1 212 371-5999exor@ABMAC.comorCommunityAuro
Palomba / Marco Rubino+39 02 8940 4231milano@communitygroup.it
Partnerre (NYSE:PRE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Partnerre (NYSE:PRE)
Historical Stock Chart
From Apr 2023 to Apr 2024