EXOR commits to improve terms on preferreds in bid for PartnerRe

New York, July 7 – EXOR SpA announced it has improved the terms of its offer to acquire PartnerRe Ltd., including a commitment to exchange PartnerRe’s preferred shares for new preferred with better terms.

EXOR said it has legally committed to offer to exchange PartnerRe’s existing series D, series E and series F preferreds for new preferreds with identical terms to the existing securities but with the following improvements:

• A 100 basis points increase in the dividend rate;

• Call protection until 2021. The PartnerRe preferreds become callable in the next three years, and the series D preferreds are already callable, EXOR notes. The company is committing not to redeem the preferreds before Jan. 1, 2021;

• EXOR will commit to limiting distributions to PartnerRe’s common shares to no more than 67% of earnings until Dec. 31, 2020, creating what EXOR called a stronger and better capitalized company. It noted that last year PartnerRe distributed 90% of earnings to shareholders.

“Under the enhanced EXOR binding offer announced today the terms will further provide PartnerRe preferred shareholders with higher return securities, non-callable for longer and in a company legally committed for five years to one of the most conservative capital distribution policies in the insurance and reinsurance industry,” EXOR said in a news release announcing the improved offer.

“This is in contrast to the AXIS/PartnerRe transaction which will adopt one of the most aggressive capital distribution policies in the industry.”

EXOR is offering $137.50 per share in cash for PartnerRe.

In its improved offer announced Tuesday, EXOR said it will allow PartnerRe to solicit bids from third parties after signing with EXOR. In this period the termination fee will be reduced to $135 million.

EXOR also said that if PartnerRe is not required to pay the $315 million termination fee to Axis it will pass the full $6.39 per share value to PartnerRe shareholders.

EXOR chairman and chief executive officer John Elkann also gave a personal commitment to provide all information necessary to secure regulatory approvals.

In its own announcement Tuesday, PartnerRe said EXOR is putting an “inadequate value” on PartnerRe’s shares.

It also said EXOR’s bid has execution risks and would have a “negative impact” on PartnerRe’s credit ratings and its preferred shares.

PartnerRe is encouraging shareholders to vote in favor of the merger with AXIS Capital Holdings Ltd.

EXOR is a Turin, Italy-based investment company controlled by the Agnelli family and listed on the Milan Stock Exchange. PartnerRe is a Pembroke, Bermuda-based reinsurance company.

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