Collapse of $9 Billion Reinsurance Sale Sends Exor Shares Down
May 13 2020 - 8:31AM
Dow Jones News
By Pietro Lombardi
Shares in Exor NV, the holding company of Italy's Agnelli
family, are under pressure after the proposed $9 billion sale of
its reinsurance business collapsed.
This comes as the latest deal to falter amid the coronavirus
pandemic, and as Exor--which also controls Fiat Chrysler
Automobiles NV--is in the midst of planning to merge the
Italian-American car maker with French peer Peugeot SA.
At 1154 GMT, Exor shares were down 5.2%.
"The news is undoubtedly negative," Equita SIM's Martino De
Ambroggi said, adding that it does however, in light of the planned
Fiat Chrysler-Peugeot deal, send a message.
"From a qualitative standpoint Exor shows that it does not need
to sell and sends a clear message to those speculating on a
possible revision of the merger with PSA terms, showing that it is
not willing to change the what agreed," Mr. De Ambroggi said.
Exor said late Tuesday that the planned sale of PartnerRe to
French insurer Covea had been scrapped after the company tried to
renegotiate the terms of the deal. It said Covea wouldn't carry out
the acquisition under the terms agreed in March.
The company said selling the reinsurance business at a price
below the $9 billion previously agreed wouldn't reflect its value,
adding that PartnerRe is not expected to take a significant hit
from the coronavirus pandemic.
"In attempting to renegotiate the agreed deal terms, Covea has
never suggested the existence of a material adverse change,
including pandemic risk, or any other issues at PartnerRe that
would explain its refusal to honor its commitments under the MOU
and Exor believes that no such basis exists," it said.
In a statement released on Tuesday, Covea said that "in light of
the current unprecedented conditions and significant uncertainties
threatening the global economic outlook, Covea has indicated to
Exor that the context does not allow the contemplated acquisition
of PartnerRe to be carried out on the terms initially
envisaged."
The failed transaction is just one of several big deals that the
coronavirus pandemic has torpedoed in recent weeks, including Xerox
Holdings Corp.'s bid for rival HP Inc., a deal valued at more than
$30 billion.
Write to Pietro Lombardi at pietro.lombardi@dowjones.com
(END) Dow Jones Newswires
May 13, 2020 08:16 ET (12:16 GMT)
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