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PartnerRe Rejects US$6.4b Exor Offer

[NEW YORK] PartnerRe Ltd rejected an unsolicited US$6.4 billion takeover offer from Italy's Exor SpA, opting to stick with merger partner Axis Capital Holdings Ltd.

Enhanced merger terms with Axis will allow reinsuer PartnerRe to pay a one-time special dividend of US$11.50 a share, according to a statement Monday from Bermuda-based PartnerRe.

PartnerRe over the past three weeks "engaged extensively with Exor and conducted a very careful and thorough evaluation of the many aspects of their proposal, including price," Chairman Jean-Paul Montupet said in the statement. "Throughout these discussions, Exor made it abundantly clear that it was not willing to adjust its price." Axis said in January that a combination with PartnerRe would create the world's fifth-largest property-and-casualty reinsurer. While a merger could help Axis compete with larger rivals like Warren Buffett's Berkshire Hathaway Inc, Munich Re and Swiss Re AG, analysts including Josh Shanker at Deutsche Bank AG and Charles Sebaski at BMO Capital Markets questioned whether the agreement was favorable for PartnerRe's shareholders.

PartnerRe surged April 14 in New York trading when Exor announced that it offered US$130 per share and said that figure was 16 per cent more than the implied value under the agreement with Bermuda-based Axis. PartnerRe climbed to US$129.25 that day from US$119.14 on April 13 and US$114.14 on the last trading day before the Axis agreement was announced.