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MONTE CARLO, Monaco – Scor SE’s top executive on Sunday reiterated the reinsurer’s rejection of an €8.21 billion ($9.51 billion) takeover bid, saying the Paris-based firm would remain independent.
“The key to the success of Scor is to be an independent company,” said Denis Kessler, CEO of Scor.
Last week, Scor turned down a friendly takeover from Paris-based mutual insurer Covea, which holds an 8.2% stake in Scor.
While there is consolidation pressure on smaller reinsurers, “Scor doesn’t need to merge,” he said during the reinsurer’s press conference at the Rendez-Vous de Septembre reinsurance meeting in Monte Carlo, Monaco.
“We have a plan, we grow, we are profitable and we are solvent; we are not in a crisis state, we don’t need support … we are in a fantastic situation,” he said.
Scor does not need a “big brother” to provide better technology or financial resources, Mr. Kessler said.
Meanwhile, at another event at the Rendez-Vous, Emmanual Clarke, president and CEO of PartnerRe Ltd. denied reports that the Bermuda-based reinsurer had held merger talks with Scor. Last week, Scor also denied the speculation.
While European reinsurers don’t face significant pressure to merge, further merger and acquisition in the reinsurance sector is likely, said analysts at Fitch Ratings Inc. at another event at the Rendez-Vous.
“Clearly, there’s a lot of appetite out there for entering the reinsurance space and Scor is just one example of that,” said Graham Coutts, a director at Fitch in London.
In particular, reinsurers operating in the Bermuda market may be more likely to be involved in mergers and acquisition following the 2018 U.S. tax overhaul, said Brian Schneider, senior director at Fitch in Chicago. The reforms curtailed Bermuda reinsurers’ ability to avoid tax on investments related to U.S. reinsurance business.
Several recent mergers and acquisitions have involved Bermuda companies – for example, American International Group Inc.’s purchase of Validus Holdings Ltd. and Paris-based Axa S.A.’s proposed purchase of XL Group Ltd. – and reinsurers remaining in the Bermuda market may see pressure to merge, he said.
“It continues to be an advantage to be in Bermuda but certainly much less so than it has in the past,” Mr. Schneider said.
The remaining reinsurers may “decide to go out and gain some scale and be part of a larger organization,” he said.
(Reuters) — Shares of French reinsurer Scor SE surged on Tuesday after its board turned down a friendly takeover offer from privately held insurance company Covea, with investors anticipating that a higher bid would materialize.