Posted on 06 Jul 2009
Reinsurer PartnerRe Ltd. said Sunday it will acquire Paris Re Holdings Ltd. in a multiple-step stock-for-stock transaction it valued at about $2 billion.
The combined company will have roughly $5.5 billion of common shareholder equity capital, putting it at the "top end of midsized reinsurers," Albert Benchimol, PartnerRe's chief financial officer, said in an interview.
Bermuda-based PartnerRe recently acquired about 6% of Paris Re's common shares outstanding in a stock-for-stock transaction at the 0.30 exchange ratio, and it has an agreement to acquire an additional 57% of Paris Re's common shares outstanding at the same ratio from the six private-equity funds that control those shares. It expects to close that portion of the deal in the fourth quarter of 2009, pending regulatory approval. PartnerRe will then offer to exchange all remaining Paris Re common shares at the same exchange ratio. The private-equity firms involved are Stone Point Capital LLC, Hellman & Friedman LLC, Vestar Capital Partners Inc., Crestview Partners LP, New Mountain Capital LLC and Caisse de Dépôt et Placement du Québec.
Paris Re is expected to distribute $310 million in cash, or $3.85 per common share, as a return of capital to its shareholders, leading to a total transaction value of about $2 billion.