By moving directly to a merger vote in lieu of an exchange offer, the amended structure is expected to expedite PartnerRe's acquisition of Paris Re, while keeping unchanged the consideration granted to Paris Re shareholders.

PartnerRe has entered into agreements to acquire 77%, and previously acquired approximately 6%, of Paris Re's outstanding common shares.

In the proposed transactions, PartnerRe offered (subject to certain adjustments) the same exchange ratio of 0.30 PartnerRe common shares for each Paris Re common share. The closing of the 77% block purchase is currently expected to occur in October 2009, subject to certain conditions, including the approval of certain insurance and competition regulatory authorities.

All PartnerRe and Paris Re shareholder approvals required in connection with the closing of the 77% block purchase have been obtained. As a result of the closing of the purchase of the 77% of Paris Re's outstanding common shares, PartnerRe will hold 83% of Paris Re's outstanding common shares.

Following the closing of the block purchase, Paris Re has agreed to call a meeting of its shareholders to vote on a proposal to effect a merger, governed by Swiss law, of Paris Re into a wholly owned subsidiary of PartnerRe. Through such merger, PartnerRe would acquire the remainder of Paris Re's outstanding shares at the same 0.30 exchange ratio.

The merger, when approved by the holders of at least 90% of all outstanding Paris Re voting rights, is expected to become effective in December 2009.

In the revised acquisition structure, the merger will no longer be preceded by a voluntary exchange offer. However, if the affirmative vote of the holders of at least 90% of all outstanding Paris Re voting rights in favor of the merger is not obtained at the shareholders' meeting to be called by Paris Re's board of directors or at any adjournment or postponement thereof, or the merger is not effective on or prior to January 31, 2010, the original transaction structure will be reinstated.

In the coming weeks, PartnerRe may enter into agreements to purchase additional Paris Re shares or secure voting commitments from certain other shareholders of Paris Re in connection with the merger vote.

Prior to the closing of the purchase of the 77% of Paris Re common shares, the consideration payable in all stages of the transaction (including the initial purchases of 6%) remains subject to adjustment up or down if the parties' relative tangible book values diverge significantly.

In addition, the number of PartnerRe shares payable for each Paris Re share in the merger will be appropriately adjusted upwards to account for any dividends declared on the PartnerRe common shares having a record date following the closing of such purchase and prior to the effective time of the merger.

PartnerRe said that the amended structure of the transaction does not change the companies' stated approach to all renewals prior to July 1, 2010, for which PartnerRe and Paris Re will renew their portfolios separately, and with the underwriting approach customary for each company.

A service of YellowBrix, Inc.