Axis Capital Holdings Limited · NYSE:AXS
Axis Capital — Merger or Acquisition (July 2015)
21 slides from Axis Capital's merger presentation, Jul 21, 2015
Slide 1: PartnerRe & AXIS: Enhanced Merger of Equals
PartnerRe & AXIS: Enhanced Merger of Equals July 21, 2015
Slide 2: Disclaimer: Participants in Solicitation
1 PartnerRe, AXIS, their respective directors and certain of their respective executive officers may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of PartnerRe is set forth in its Annual R
Slide 3: Executive Summary
2 The enhanced merger terms provide improved value to PartnerRe shareholders Strategic merits of transaction remain compelling Enhanced terms to the preferred shareholders Significant execution risks remain unaddressed and misunderstood by EXOR The AXIS transaction remains superior; EXOR O
Slide 4: Enhanced Merger Terms
3 Enhanced Merger Terms $17.50 Pre - Closing Dividend Enhanced Preferred Offer Enhanced Closing Certainty Other Increased one - time extraordinary cash dividend to $17.50 (1) per common share payable to PartnerRe common shareholders immediately prior to closing — $6.00 increase from prior $11.50 d
Slide 5: Attractive Financial Profile
4 Attractive Financial Profile Rating Agencies Capital Management EPS ROE Capital return plans for combined company previously reviewed and approved by rating agencies Funding of incremental special dividend from previously approved capital return plans Continued commitment to return of capita
Slide 6: Improvement in Merger Terms is to the Further Benefit of PartnerRe Shareholders
5 Improvement in Merger Terms is to t he Further Benefit of PartnerRe Shareholders ▪ PartnerRe’s Board of Directors (“ BoD ”) previously supported the merger of equals with AXIS as delivering the most compelling opportunity for PartnerRe shareholders ─ Merger allows PartnerRe to invest in the primar
Slide 7: MergeCo Creates Significant Value for PartnerRe Shareholders
6 12/31/2015 MergeCo Book Value @ 1.00x P/BV (1) 6 MergeCo Creates Significant Value for PartnerRe Shareholders Source: S - 4 filed by both AXIS and PartnerRe on 6/1/2015. Market data as of 7/15/2015. Note: Assumes diluted MergeCo shares at closing per S - 4. (1) Analysis assumes a pro forma TBVPS o
Slide 8: AXIS Valuation Levels in Context
7 +11.2 % +11.4 % AXS Peers Source: Company filings, FactSet . Note : Market data as of 7/16/15. Peer set includes ACE, ACGL, AGII, AHL, AWH, ENH, MRH, RE, RNR, VR, and XL . (1) Last trading day prior to transaction announcement on 1/25/15. AXIS Valuation Levels in Context AXIS’ standalone valuation
Slide 9: Strategic and Financial Rationale of the Merger is Compelling
8 Strategic and Financial Rationale of the Merger is Compelling Global insurance/reinsurance powerhouse built to perform through secular and cyclical change — Strengthened positioning expands business opportunities — “Go - to” market for profitable business opportunities — Diversified, less volati
Slide 10: Recent Developments Reinforce Rationale of Merger
9 Recent Developments R einforce R ationale of Merger ACE/Chubb deal supports the industrial logic of consolidation, diversification and cost savings in the current macroeconomic and insurance industry environment “What was a very lucrative business (reinsurance) is no longer a very lucrative busi
Slide 11: New Terms of EXOR Offer Are Not Meaningful
10 New Terms of EXOR Offer Are Not Meaningful Cap on Dividends Go Shop Provision Termination Fee Has been six months since initial announcement of merger with AXIS — EXOR has admitted that finding other interested buyers is unlikely Have received one unsolicited proposal from EXOR, but unlike ot
Slide 12: Certainty of Timing is Critical for Reinsurance Renewals
11 Certainty of Timing is Critical for Reinsurance Renewals Monte Carlo Global clients (Sep 13 - 17) PartnerRe shareholder meeting (August 7) The renewal process for reinsurance policies commencing on January 1 (“1/1”) takes place between September and December 31 each year. The majority of reinsu
Slide 13: EXOR transaction timing is unknowable; AXIS MOE remains on track
12 EXOR transaction timing is unknowable; AXIS MOE remains on track for Q3 closing Entering into merger agreement with EXOR unknown duration At least 6 months (Best case estimate + full cooperation) PartnerRe shareholder meeting (August 7) Regulatory approval period The EXOR O ffer can not close thi
Slide 14: PartnerRe / AXIS Transaction Delivers Superior Value
13 PartnerRe / AXIS Transaction Delivers Superior Value Transaction Structure Value to PartnerRe Common Shareholders Value to PartnerRe Preferred Shareholders Precedent acquisitions imply a value well in excess of $ 140.50 (1) per share Cash consideration removes future upside participation No
Slide 15: Enhanced Terms for PartnerRe Preferred Shareholders
14 PartnerRe / AXIS Coupon 100 basis points per annum greater than the current per annum dividend rate, resulting in the following dividend rates (1) : 7.50% for Series D 8.25% for Series E 6.875% for Series F Redemption Date Not redeemable prior to the later of 5th anniversary of issuance
Slide 16: Do the Revisions to the EXOR Offer Address the Serious Execution Risks?
15 Do the Revisions to the EXOR Offer (1) Address the Serious Execution Risks Previously Identified by PartnerRe? After PartnerRe published a presentation titled “ Unacceptable Risks Posed by the EXOR Offer ”, EXOR has revised the terms of its merger agreement on three separate occasions, (2) but
Slide 17: PartnerRe faces significant financial exposure if EXOR fails to obtain regulatory approvals
16 PartnerRe faces significant financial exposure – and opportunity cost – if EXOR fails to obtain regulatory approvals (1) Source: http://www.mergermetrics.com. (2) Transaction Value is calculated based on the aggregate consideration offered on a per share basis multiplied by the numbe r o f outsta
Slide 18: EXOR's controlling shareholders have not provided contractual commitments
17 EXOR’s controlling shareholders have not provided contractual commitments to make the required regulatory filings (1) Dicembre Societa Semplice Simon Fiduciaria S.p.A. Siglabile Simonfid S.p.A. Pons Finance S.A. Giovanni Agnelli e C. Societá in Accomandita p er Azioni Enne Societá Semplice EXOR S
Slide 19: No "hell or high water" commitment
18 No “hell or high water” commitment “ Hell or high water” was not required in AXIS transaction due to significantly lower regulatory risk profile for two well - established insurance companies . EXOR’s financing sources have a veto over potentially critical concessions required to obtain reg
Slide 20: This communication does not constitute an offer to buy or sell or the solicitation
19 19 This communication does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities or a solicitation of any vote or approval. This communication relates to a proposed business combination between PartnerRe Ltd. (“ PartnerRe ”) and AXIS Capital Holdings
Slide 21: Certain statements in this communication regarding the proposed transaction between PartnerRe and AXIS are
20 20 Certain statements in this communication regarding the proposed transaction between PartnerRe and AXIS are “forward - looking” sta tements. The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “illustrative,” “intend,” “estimate,” “probable,” “project,” “fo rec asts,” “predict,” “outlo
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