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Hartford rejects rival Chubb’s $23 billion offer


(Reuters) – Hartford Financial Services Inc. on Tuesday rejected a $23.24 billion takeover offer from larger rival Chubb Ltd. derailing what would have been the largest deal in the property/casualty insurance sector since 2016.

Hartford in a short statement said its board, after consultation with its financial and legal advisers, had determined that entering into talks about a deal would not be in the best interests of the company and its shareholders.

Chubb had made an offer of $65 per share for the insurer on March 18, a premium of about 13% to Hartford's closing stock price a day earlier.

Hartford's rejection was widely expected, as analysts had said the company was worth $80 per share or more.

Wells Fargo analyst Elyse Greenspan wrote in a note to clients on Tuesday that Chubb may raise its offer.

Ms. Greenspan also said she was not surprised by Hartford's rejection and recommended buying its shares if they fall. 

"And we think as a stand-alone company, Hartford has a good path ahead, given the margin outlook they have provided for 2021," she added.

A deal between Hartford and Chubb would be the biggest in the sector since Aon PLC’s $30 billion bid to buy Willis Towers Watson PLC last year, and the largest involving U.S. property/casualty insurers since Chubb was created in its current form in January 2016.

Hartford's small-business insurance franchise would be the main draw for Chubb, which currently focuses on covering mid-sized and large companies.

Founded in 1810, Hartford famously sold baseball slugger Babe Ruth an insurance policy in 1920 for disability protection and also insured the only home Abraham Lincoln ever owned.