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No new suitors, Exor-PartnerRe marriage to proceed

No new suitors, Exor-PartnerRe marriage to proceed

MONTE CARLO, Monaco — The 30-day “go shop” provision included in Exor S.p.A.'s $6.8 billion proposed purchase of reinsurer PartnerRe Ltd. has expired and ended a period of “uncertainty,” PartnerRe President Emmanuel Clarke said.

The provision, which expired Monday, was included in Exor's purchase agreement with the Hamilton, Bermuda-based reinsurer to allow PartnerRe to seek alternative suitors. None emerged and PartnerRe executives reaffirmed support for the Exor deal.

“We have had a few months of uncertainty with bifurcated options on our future, but now this period is coming to an end, and it is a happy ending as far as we're concerned,” Mr. Clarke, PartnerRe's newly appointed president, said during the annual Rendez-vous de Septembre reinsurance summit in Monaco.

“A happy ending but also a new start,” added Mr. Clarke, who addressed questions of ownership stability and Exor's intent during a news conference late Monday.

“This is clearly a long-term private ownership and not a private equity play,” Mr. Clarke said. “Reinsurance is a long-term partnership business. Clients and brokers do not like surprises, and so our commitment is one of consistency and continuity.”

“Private ownership will bring financial strength,” he said. “But private ownership is also about increased flexibility by lifting some of the natural constraints of a (U.S. Securities and Exchange Commission-regulated) public company.”

“We fought very hard to be here,” said John Elkann, chairman and CEO of Turin, Italy-based Exor, which lured PartnerRe away from a planned merger with Bermuda-based Axis Capital Holdings Ltd.

The Axis-PartnerRe deal was announced in January. Exor entered in April with an initial bid of $6.1 billion, eventually winning the battle in August after raising its all-cash offer to $6.8 billion.

Mr. Elkann said he believes PartnerRe is a “very adequate size” for the sector.

“Scale in reinsurance is about relevance, whether you are relevant enough to access the business, and I believe we have that size right to access the business,” said Mr. Clarke, who eschewed any speculation about near-term acquisitions to build scale. “I don't think there's any urgent need to look for any acquisitions.”

Exor was a founding shareholder of PartnerRe in 1993, but Mr. Elkann said this deal is purely a financial investment.

“The company did well in the last 20 years, so we probably exited too early, and we're happy to be back,” he said.

The deal, still subject to shareholder and regulatory approval, is expected to close in the first quarter of 2016.

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