Exor offers special dividend after Axis/PartnerRe unveil sweetened terms

Italian investment company Exor has revealed it will offer PartnerRe shareholders a special pre-closing dividend of $3 per share.

This is in addition to Exor’s confirmed $137.50 per share all-cash offer, bringing the total all-cash consideration to $140.50 per share.

Last week, Axis and PartnerRe sweetened their merger agreement, increasing the special cash dividend payable to PartnerRe common shareholders to $17.50 and pushing back the shareholder vote by two weeks to August 7, 2015.

Exor said it added the special dividend to compensate PartnerRe shareholders for the expected closing of the Exor transaction in early 2016. Previously, Exor had expected the transaction to occur in the fourth quarter of 2015.

“This additional $3 per share of real incremental value to PartnerRe common shareholders further widens the gap in value with the Axis transaction,” said Exor.

It added: “Under the Axis transaction, the increase in the special dividend announced on July 16, delivers to PartnerRe shareholders less than $1 per share of incremental value, after adjusting for: i) the ownership split in the combined AXIS/PartnerRe; ii) the reported declines in the second-quarter 2015 tangible book value of both PartnerRe and AXIS; and iii) the costs associated with the 100 basis point increase in the dividend rate for PartnerRe preferred shares.”

Exor reiterated its belief that through its actions, PartnerRe’s board has effectively acknowledged the superiority of the Exor binding offer by seeking enhanced terms with AXIS.

“In addition, despite PartnerRe’s statements to the contrary, Exor does not believe that the Internal Revenue Service (IRS) will treat the preferred shares in the Exor proposed exchange offer as part of a ‘listed transaction’ or ‘prohibited tax shelter’ involving ‘fast-pay stock’,” added the investment company.