French reinsurance powerhouse Scor has called an unsolicited EUR8.3bn takeover offer from French mutual Covea “incompatible” with its “strategy of independence” as it said any revised public bid would be deemed hostile.
In a press release, the reinsurer confirmed that Covea had sent a letter proposing to open talks about taking a majority stake in Scor.
But, Scor went on, its board unanimously rejected the idea - instead favouring its future as an independent company.
“On 30 August 2018, Scor’s board of directors reviewed the terms and conditions of this unsolicited proposal in detail and determined that it is fundamentally incompatible with Scor’s strategy of independence, which is a key factor of its development, that it would jeopardize the group’s strong value-creating strategy and that it reflects neither the intrinsic value nor the strategic value of Scor,” the reinsurer said.
“This project was met with unanimous opposition from Scor’s executive committee,” it went on. “In view of this, any public bid would be deemed hostile.”
Scor said the decision reaffirmed its board’s “complete trust” in the management team.
Earlier today, Covea posted a letter on its website revealing that it had made a “friendly” EUR43 per share offer for Scor on 24 August.
The bid marked a 24.2 percent uplift on Scor’s EUR34.62 closing share price in Paris that day.
Scor’s shares climbed by as much as 10.4 percent in early trading today. They were changing hands for around EUR38.30 each at around lunchtime in France.
The development is another chapter is what is already an extraordinary year for (re)Insurance M&A.
In January, AIG announced an agreement to acquire the Lloyd’s and Bermuda (re)insurer Validus for $5.6bn, the equivalent of a high 1.8x price-to-book multiple. That deal was quickly followed by Axa’s eye-watering $15.3bn purchase of XL Group, the equivalent of an even higher 2x price-to-book multiple.
More recently, the Bermudian (re)insurer Aspen Insurance was finally sold to Apollo Global Management for $2.6bn, equivalent of around 1.13x book.
Also in August, The Hartford finally realised its ambition of acquiring a specialty insurer when it purchased US group Navigators - which also owns a Lloyd’s platform - at a handsome premium of 1.8x book.
A further unexpected move occurred last week when Markel became the largest ILS fund manager by agreeing to buy Nephila, which has over $12bn assets under management.
Later this week, China Re is expected to announce its agreed purchase of top-ten Lloyd’s insurer Chaucer for 1.4x book, or circa $1b, from its owner The Hanover.