Hartford Financial Services Group (Hartford) has rebuffed the advances of global insurer Chubb, describing the giant’s proposed US$23 billion takeover bid as “not […] in the best interests of the company and its shareholders”.
According to Bloomberg, Hartford’s board is not looking to enter discussions regarding a strategic transaction. Rather, the Connecticut-based property & casualty insurer has “reaffirmed its commitment and resolve in the continued execution of the Hartford’s strategic business plan.”
News of the mammoth takeover bid, which would have been one of the industry’s biggest deals in years, first broke on March 18. Bloomberg reported that Chubb had offered US$65 a share for the longstanding P&C insurer, which has roots tracing back more than 200 years.
The Hartford confirmed it had received an “unsolicited” non-binding takeover proposal from Chubb, which its board of directors was “carefully considering … with the assistance of its financial and legal advisors”.
While the Hartford’s rejection is a knockback for Chubb CEO Evan Greenberg, who is seeking to expand Chubb’s capabilities in the market for small-business coverage and add a fund manager and employee-benefits operation, there might be opportunities for the insurance behemoth to sweeten the deal.
As reported by Bloomberg, David Havens, a credit analyst at Imperial Capital, said in a note to clients: “Obviously, the Hartford board is underwhelmed by Chubb’s offer. But, Chubb could certainly come back with sweetened deal terms.” On a similar vein, analysts including Wells Fargo & Co.’s Elyse Greenspan said in notes last week that the initial US$65-a-share offer was probably “too low.”
The deal, if it ever comes back to the table, will be one of Greenberg’s most significant transactions, coming close to Chubb’s near US$30 billion combination with Ace Ltd. in 2016.