PartnerRe (NYSE:PRE) today announced that it has entered into definitive
agreements to acquire PARIS RE (EURONEXT:PRI), a French-listed,
Swiss-based diversified reinsurer. PartnerRe will exchange 0.30 of its
common shares for each PARIS RE common share outstanding in a
stock-for-stock transaction.
This acquisition is expected to add $1.7 billion in new shareholders’
equity to PartnerRe. Separately, PARIS RE is expected to distribute $310
million (net of amount due on existing treasury shares held by PARIS
RE) in cash as a return of capital to its shareholders, leading to a
total transaction value of approximately $2 billion.
Upon successful completion of the various steps of this transaction,
PARIS RE, together with its operating subsidiaries, will be fully
integrated into PartnerRe’s existing operating structure. PartnerRe
President & CEO Patrick Thiele said, “This is an important acquisition
for PartnerRe and provides us the opportunity to enhance our already
successful franchise. The greater market presence, risk diversification,
capital strength and scale that is created will provide more balance and
stability to our Company in the face of uncertain and volatile financial
and reinsurance markets.”
Mr. Thiele added, “PARIS RE has established itself as a premier European
reinsurer and has a successful track record as a publicly-traded
company. This acquisition strengthens PartnerRe’s balance sheet and
financial flexibility and allows us to leverage our infrastructure and
capabilities over a broader base for the benefit of key stakeholders of
both companies: clients, shareholders and employees. Our history of
success in integrating acquired companies and the rigorous analysis
completed gives us confidence that this integration process will be a
smooth and successful one.”
In the first step of the transaction, PartnerRe, which recently acquired
approximately 6% of PARIS RE’s outstanding common shares in a
stock-for-stock transaction at the 0.30 exchange ratio, will acquire an
additional 57% of PARIS RE’s outstanding common shares at the same
exchange ratio. The closing of that block purchase is expected to occur
in the fourth quarter of 2009, subject to certain conditions including
approval of certain insurance and competition regulatory authorities,
PartnerRe shareholder approval and PARIS RE shareholder approval to
remove the provisions of its articles of association purporting to
require a cash takeover bid for any acquisition of more than one-third
of the voting rights of PARIS RE. The sellers in the block purchase have
agreed to vote in favor of such removal.
In the coming weeks, PartnerRe may enter into agreements to purchase
additional PARIS RE shares from certain other shareholders who were
shareholders of PARIS RE prior to its initial public offering and their
private transferees. Such purchases, which are expected to be
consummated simultaneously with the closing of the block purchase in
exchange for PartnerRe common shares at the same 0.30 exchange ratio,
will be disclosed in filings with the Securities and Exchange Commission
and with the Autorité des Marchés Financiers (the French listing
authority).
Immediately prior to the closing of the block purchase, PARIS RE intends
to effect a return of capital equivalent to $310 million (net of amount
due on existing treasury shares held by PARIS RE), or $3.85 per common
share, in cash, to all of its shareholders.
Following the closing of the block purchase, PartnerRe intends to
commence a voluntary exchange offer for all remaining PARIS RE common
shares at the same 0.30 exchange ratio. The exchange offer would be
subject to certain conditions including the approval of the Autorité
des Marchés Financiers, an independent expert’s report and the
listing of PartnerRe shares on Euronext Paris. While the terms of the
exchange offer will provide PARIS RE shareholders with only the right to
receive PartnerRe shares at the same 0.30 exchange ratio, PartnerRe will
seek to provide facilities to enhance shareholders’ access to liquidity
including through the New York Stock Exchange.
