Proxy Mosaic
Recognizes “Premium and Certainty Inherent in EXOR’s Superior
All-cash Offer”
Proxy Mosaic Affirms
“Conceivable that PartnerRe Preferred Shares Could Rise Above Their
Current BBB Rating Within the EXOR Capital
Structure”
EXOR Urges All
Shareholders to Vote AGAINST AXIS Transaction at Shareholder
Meeting Scheduled for August 7
EXOR S.p.A. (“EXOR”; EXO.IM), one of Europe’s leading listed
investment companies and the largest shareholder of PartnerRe Ltd.
(“PartnerRe”; NYSE:PRE), welcomes the recommendation from Proxy
Mosaic, LLC, a proxy research and corporate governance advisory
firm, that PartnerRe Common and Preferred shareholders vote AGAINST
the three proposals related to the AXIS transaction at the
PartnerRe Special General Meeting (“SGM”) to be held on August 7.
Their recommendation follows a detailed review of the
PartnerRe/AXIS and EXOR proposals.
The Proxy Mosaic report follows those of fellow proxy voting
advisory firms Institutional Shareholder Services Inc. (ISS) and
Glass Lewis & Co., which also recommended PartnerRe
shareholders should vote against the AXIS transaction. EXOR has
proposed an alternative transaction for PartnerRe of $140.50 per
share in cash for Common Shareholders and significantly enhanced
terms for Preferred Shareholders.
In its recommendation to vote AGAINST the PartnerRe – AXIS
amalgamation, Proxy Mosaic said:
- "… we believe that the premium and
certainty inherent in EXOR’s superior all-cash offer outweighs the
potential upside in AXIS’ economically inferior offer."
- "…EXOR’s is an all-cash offer by a
well-capitalized holding company with prior experience in the
insurance sector, which would present minimal antitrust concerns,
and even less in the way of integration challenges given that
PartnerRe under the EXOR umbrella would essentially operate as if
nothing had changed. Alternatively, PartnerRe’s all-equity merger
with AXIS entails inherent integration challenges as well as
potential material loss that would have to be borne by shareholders
in the event of market downturn prior to the closing date."
- “…despite the protestations from
PartnerRe to the contrary, there has been no real indication from
the ratings agencies that the preferred shares are at risk of a
downgrade should the EXOR offer prevail. In fact, because EXOR
would adopt a more conservative capital distribution policy
post-acquisition, it’s conceivable that PartnerRe preferred shares
could rise above their current BBB rating within the EXOR capital
structure.”
- "Ultimately, preferred shareholders
should ask themselves the following question: Would you rather hold
a security within the capital structure of a disciplined holding
company, or a security within an amalgamated reinsurance company
that 1) has committed itself to extensive capital distribution
plans for common shareholders that could put your dividend at-risk,
and 2) is still captive to the kind of earnings volatility that is
inherent in the insurance industry, even with the benefit of
“scale” and in a benign catastrophe environment?"
- "Private ownership [by EXOR] allows for
greater capital retention, which in turn facilitates more
flexibility of the reinsurer and a stronger competitive position to
weather unforeseen catastrophes, a business scenario not uncommon
in insurance. Within a holding company, the naturally fluctuating
earnings inherent to the reinsurance business would be less
meaningful, and a “private” PartnerRe would be insulated to some
degree from some of the consequences of industry headwinds.”
- "We suspect that the upside to the
merger has been exaggerated, with multiple expansion proving
optimistic and the synergy realization timeline too
aggressive."
- “It is also worth noting that this
[AXIS] premium may be somewhat “illusory” in the sense that AXIS’
stock price seems to be buoyed by external factors, such as the
possibility that AXIS itself may be a target of Arch Capital if
this particular deal falls through, as well as the fact that AXIS
would be due a $280 million termination fee if EXOR is successful
in acquiring PartnerRe.”
EXOR reminds PartnerRe shareholders that voting AGAINST the AXIS
transaction at the SGM on August 7 is a critical step to enable
PartnerRe to accept EXOR’s fully-financed, all-cash superior offer,
delivering Common Shareholders the certainty of $140.50 per share
in cash and providing Preferred Shareholders with a conservative
credit profile and significantly enhanced terms.
In line with the recommendations by ISS, Glass Lewis and Proxy
Mosaic, EXOR urges PartnerRe Common and Preferred Shareholders to
vote the GOLD proxy card
AGAINST all three proposals
related to the AXIS transaction and asks shareholders not to sign
or return any WHITE proxy cards they receive from PartnerRe.
Shareholders who have already returned a WHITE proxy card can
change their vote by simply returning the GOLD proxy card.
PartnerRe shareholders seeking clarity on the EXOR offer can
contact EXOR’s proxy solicitor, Okapi Partners LLC, at
info@okapipartners.com or toll free at (877) 796-5274 (banks and
brokerage firms should call +1 (212) 297-0720). Information about
EXOR’s offer and access to proxy materials are also available at
www.exor-partnerre.com.
ABOUT EXOR
EXOR is one of Europe’s leading investment companies and is
controlled by the Agnelli family. It is listed on the Milan Stock
Exchange and has a market capitalization of approximately $12
billion and a net asset value of approximately $15 billion. For
over a century EXOR has made successful investments, including more
recently the acquisition of Chrysler by Fiat, creating the world’s
seventh largest car producer (“FCA”) with a $20 billion market
capitalization.
EXOR focuses on long-term investments in profitable global
companies, primarily in Europe and the United States, that benefit
from its strong permanent capital base. In addition to FCA, its
principal investments include CNH Industrial, the fourth largest
global capital goods company (with a $12 billion market
capitalization), and Cushman & Wakefield, the world’s largest
private commercial real estate services company.
FORWARD-LOOKING STATEMENTS
Certain statements and information contained in this
communication that are not statements or information of historical
fact constitute forward-looking statements, notwithstanding that
such statements are not specifically identified as such. These
statements may include terminology such as “may”, “will”, “expect”,
“could”, “should”, “intend”, “commit”, “estimate”, “anticipate”,
“believe”, “remain”, “on track”, “design”, “target”, “objective”,
“goal”, “forecast”, “projection”, “outlook”, “prospects”, “plan”,
“intend”, or similar terminology, including by way of example and
without limitation plans, intentions and expectations regarding the
proposal to acquire PartnerRe, the financing of a potential
transaction, and the anticipated results, benefits, synergies,
earnings accretion, costs, timing and other expectations of the
benefits of a potential transaction.
Forward-looking statements are related to future, not past,
events and are not guarantees of future performance. These
statements are based on current expectations and projections about
future events and, by their nature, address matters that are, to
different degrees, uncertain and are subject to inherent risks and
uncertainties. They relate to events and depend on circumstances
that may or may not occur or exist in the future, and, as such,
undue reliance should not be placed on them. Actual results may
differ materially from those expressed in such statements as a
result of a variety of factors, including changes in general
economic, financial and market conditions and other changes in
business conditions, changes in commodity prices, the level of
demand and financial performance of the major industries our
portfolio companies serve, changes in regulations and institutional
framework (in each case, in Italy or abroad), and many other
factors, most of which are outside of the control of EXOR. EXOR
expressly disclaims and does not assume any liability in connection
with any inaccuracies in any of these forward-looking statements or
in connection with any use by any party of such forward-looking
statements. Any forward-looking statements contained in this
communication speaks only as of the date of this communication.
EXOR undertakes no obligation to update or revise its outlook or
forward-looking statements, whether as a result of new developments
or otherwise. Names, organizations and company names referred to
may be the trademarks of their respective owners. This
communication does not represent investment advice neither a
solicitation, nor a recommendation nor an invitation, nor an offer
for the purchase or sale of financial products and/or of any kind
of financial services as contemplated by the laws in any country or
state.
IMPORTANT INFORMATION FOR INVESTORS AND SHAREHOLDERS
This communication does not constitute an offer to buy or sell
or the solicitation of an offer to buy or sell any securities. EXOR
has filed a proxy statement (the “Proxy Statement”) with the United
States Securities and Exchange Commission (the “SEC”) in connection
with the upcoming special meeting of the shareholders of PartnerRe
at which the PartnerRe shareholders will consider certain proposals
regarding the proposed transaction with AXIS (the “Special Meeting
Proposals”).
This material is not a substitute for the Proxy Statement that
EXOR has filed with the SEC or any other documents which EXOR may
send to its or PartnerRe’s shareholders in connection with the
proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO
READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS IF AND
WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. All such
documents, when filed, are available free of charge at the SEC’s
website (www.sec.gov) or by directing a request to EXOR through the
investor contacts listed above.
This press release does not address the tax consequences to
holders of PartnerRe preferred shares that receive surviving
company shares in the merger. Holders of PartnerRe preferred shares
are urged to consult their tax advisors as to the United States
federal, state, local and non-United States tax consequences to
them of participating in the merger, some of which are uncertain
and may depend on such holders’ individual circumstances.
PARTICIPANTS IN THE SOLICITATION
EXOR and its directors, executive officers and other employees
may be deemed to be participants in any solicitation of
shareholders in connection with the Special Meeting Proposals.
Information regarding EXOR’s directors and executive officers is
available in EXOR’s public announcements and filings with the SEC,
Consob and the Borsa Italiana, which can also be found at
www.exor.com. Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, is available in the
Proxy Statement.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150729005983/en/
Investors:EXOR Investor RelationsFabiola Portoso, +39 011
509 0345ir@exor.comorOkapi Partners LLC is assisting EXOR with its
efforts to solicit proxies. PartnerRe shareholders who have
questions about voting their shares should call Okapi Partners LLC
toll free at (877) 796-5274 (banks and brokerage firms should call
+1 (212) 297-0720).orOkapi PartnersBruce H. Goldfarb / Pat McHugh /
Jon Einsidler / Lydia
Mulykinfo@okapipartners.comorMedia:EXOR Media
RelationsAndrea Griva, +39 011 509 0318media@exor.comorStockWell
CommunicationsPhilip Gawith / Richard Holloway / Laura Gilbert+44
20 7240 2486exor@stockwellgroup.comorAbernathy MacGregorTom Johnson
/ Mike Pascale / Allyson Vento+1 212
371-5999exor@ABMAC.comorCommunityAuro Palomba / Marco Rubino+39 02
8940 4231milano@communitygroup.it
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