Agnellis’ Exor Tumbles on Collapse of $9 Billion PartnerRe Sale

Agnellis Won’t Make Concessions on PartnerRe; Deal Collapses

13 May 2020, 06:03 PM IST

(Bloomberg) -- The Agnelli family’s Exor NV holding will retain its PartnerRe unit after Chairman John Elkann turned down a request by France’s Covea to renegotiate an agreed-upon $9 billion acquisition of the reinsurance company.

Exor shares fell as much as 5.3% in Milan, giving the company a market value of 10.9 billion euros ($11.8 billion).

Covea was seeking a lower price for Bermuda-based PartnerRe in the wake of the coronavirus outbreak, citing “unprecedented conditions and significant uncertainties threatening the global economic outlook.”

“Covea has indicated to Exor that the context does not allow the contemplated acquisition of PartnerRe to be carried out on the terms initially envisaged,” the company said in a statement late Tuesday after Exor announced it will hold onto PartnerRe.

Exor had agreed in March to sell its reinsurance business to the French insurer for about $9 billion in cash. Covea had approached the Italian billionaire clan -- the founding family of auto maker Fiat -- in February with an unsolicited bid for the business.

The Agnelli holding ruled out renegotiating, saying “a sale of PartnerRe on terms inferior to those established in the memorandum of understanding fails to reflect the value of the company.” The Exor board noted the “positive outlook” for PartnerRe, which isn’t expected to be significantly affected by the Covid-19 outbreak, it said in a statement.

A sale would have marked a significant gain for the billionaire Agnelli family and another major deal for Exor just months after Fiat Chrysler agreed to combine with PSA Group to create the world’s fourth-biggest carmaker. Exor would have posted an aggregate cash return of $3 billion with the sale. Exor controls Fiat Chrysler and Ferrari NV.

The PartnerRe deal marks the latest merger to fall victim to the virus outbreak. Xerox Holdings Corp. in April ended its hostile takeover bid for HP Inc. because of uncertainty stemming from the pandemic, marking a blow to the photocopier company’s efforts to stimulate future growth.