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Chubb approaches The Hartford over $23.24bn combination

19th March 2021 - Author: Luke Gallin

Global insurer and reinsurer Chubb has confirmed that it has made an approximately $23.24 billion acquisition offer for The Hartford, valuing the firm at $65 per share.

ChubbLate yesterday, reports emerged that Chubb was considering the takeover of rival insurer The Hartford.

Chubb has now confirmed that on March 11th, it presented The Hartford with a proposal for a combination which it believes “would be strategically and financially compelling for both sets of shareholders and other constituencies.”

This $65 per share proposal represents a premium of 26% based on the firm’s unaffected 20-day volume weighted average share price of $51.70 as of March 10th, 2021. Chubb says that the consideration represents a mix of stock with the majority in cash.

As the news broke yesterday, The Hartford was valued at around $20.7 billion (at opening yesterday), so Chubb’s $65 per share offer, the roughly $23.24 billion, is actually above this valuation and also the rumoured $22 billion.

RMS

However, following rumours of a potential offer, The Hartford’s shares lifted by 19% during the day, taking its valuation to a high of $24.6 billion during trading, to close the day at $24.36 billion.

Chubb notes that it has “not yet received a response to our proposal but are looking forward to constructive, private discussions in order to expeditiously consummate a fair transaction that benefits all of our respective stakeholders.”

The re/insurer continues to stress that no agreement has been reached, adding that there can be no assurance any transaction will result from these discussions, and even if a transaction is agreed upon, there can be no assurances as to its terms, structure or timing.

The Hartford has also confirmed that it has received an unsolicited, non-binding offer from Chubb. Now, the company’s Board of Directors will carefully considering the proposal with the assistance of its financial and legal advisors.

“The Board of Directors is committed to acting in the best interests of shareholders over the long term,” says the firm.

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