Axis and Partner agree on enhanced terms for merger
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Axis Capital Holdings Ltd. and PartnerRe Ltd., both of Pembroke, Bermuda, have enhanced the terms of their merger proposal as Axis again ups the ante in the battle for control of Partner, the companies said in a statement Thursday.
Axis first proposed the merger in January but since April has been fending off a competing cash offer from Torino, Italy-based investment firm Exor S.p.A.
Exor was last to raise the stakes at an investor presentation last week in New York when it offered an additional special dividend to Partner shareholders to defray the cost of any potential break-up fee, as high as $315 million, should Partner choose Exor's bid and walk away from Axis.
Axis has now responded by raising its own proposed special dividend to $17.50/share from an originally proposed $11.50/share.“We are very pleased to agree to enhanced terms with Axis Capital so that shareholders can realize the value of the combination,” Jean-Paul Montupet, PartnerRe chairman said in the statement.
Axis said it would also match Exor's terms for preferred shareholders provided assurances could be secured from the Internal Revenue Service that this would not result in an onerous tax burden.
“At the end of the day, the merger creates opportunities that neither company could really achieve on its own in the near-term — including expense synergies in excess of $200 million, significant capital efficiencies, and incremental growth opportunities,” Albert A. Benchimol, Axis Capital CEO, said in the statement.
In a presentation, the companies said the merger would add to operating earnings and return on equity in year one, and will achieve double-digit earnings per share accretion and a double-digit return on equity by 2017.
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