PartnerRe, which reported a net loss attributable to common shareholders of US$433 million (around £353.1 million) for the first quarter of 2020, will no longer be acquired by Covéa.
In a brief statement, the French mutual insurance group said: “In light of the current unprecedented conditions and significant uncertainties threatening the global economic outlook, Covéa has indicated to Exor that the context does not allow the contemplated acquisition of PartnerRe to be carried out on the terms initially envisaged.”
This means Exor, which also owns Ferrari and Fiat Chrysler Automobiles, will retain ownership of the Bermuda-based reinsurer. The board of directors of Exor has acknowledged Covéa’s decision not to finalise the agreement.
PartnerRe, while it posted a Q1 loss, had strong solvency and liquidity at the end of the first quarter, with a solvency ratio estimated in excess of 250% as well as cash and cash equivalents of US$1.9 billion (around £1.5 billion).
Read more: Covéa and Exor set PartnerRe price tag
Commenting on the deal falling through, Exor stated: “The board noted the positive outlook for PartnerRe, which enjoys one of the highest capital and liquidity ratios in the global reinsurance industry and is not expected to be significantly affected by the COVID-19 outbreak.
“The board therefore reiterated its strong belief that a sale of PartnerRe on terms inferior to those established in the MOU (Memorandum of Understanding) fails to reflect the value of the company.”
Exor, which was set up by the late Italian businessman Giovanni Agnelli, went so far as to say that it does not think Covéa had basis for the move.
“In attempting to renegotiate the agreed deal terms,” noted Exor, “Covéa has never suggested the existence of a material adverse change, including pandemic risk, or any other issues at PartnerRe that would explain its refusal to honour its commitments under the MOU, and Exor believes that no such basis exists.”