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AXIS increases Novae offer by 2%

25th August 2017 - Author: Steve Evans

Global specialty insurance and reinsurance firm AXIS Capital Holdings Limited has increased its acquisition offer for the shares of Lloyd’s of London focused diversified specialty re/insurer Novae Group plc by 2%, valuing the firm at £477.6 million (US $612m at today’s FX rates).

HandshakeThe “full and final” offer of 715 pence per share is a decent hike on the 700 pence per share offered as of the initial announcement of the M&A deal on the 5th July.

Albert Benchimol, President and CEO of AXIS Capital, commented on the revised offer; “This acquisition is fully aligned with AXIS Insurance’s international specialty insurance growth strategy and will combine two highly complementary businesses. We firmly believe this combination will create significant value for AXIS’s shareholders with limited execution risk.

“The benefits of this transaction announced with our initial offer have not materially changed with this revised offer. We continue to expect meaningful earnings and ROE accretion within the first year after close.

We believe that our final bid represents compelling and full value for Novae, as recognized by the Boards of both companies. By offering Novae Shareholders an improved cash offer, AXIS aims to bring certainty to the transaction.”

AXIS said that this offer would not be bettered unless a rival and higher bid comes in from another Novae suitor.

For Novae shareholders this revised offer represents a premium of around 23% to the closing price of 581 pence per Novae Share on 4th July 2017, the day prior to the original announcement of a deal.

The directors of Novae said that the increased offer is in the best interests of Novae shareholders and advised them to accept the revised deal.

It’s unclear whether there has been a push for a higher bid from shareholders, or whether there has been another potential suitor in the wings. It had been assumed that AXIS had this deal sealed at the original purchase price, but a 2% increase has been deemed as warranted anyway.

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