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EXOR boss rallies shareholders as COVID-19 looms over big deals

9th April 2020 - Author: Charlie Wood

The boss of Agnelli family owned holding company EXOR expects the spirit and resolve of his companies to ensure they emerge stronger when the coronavirus pandemic passes.

covea-partnerre-exor-logos“These have been challenging days and weeks for us all and we know the ripples from
this crisis will likely continue for some time,” John Elkann told shareholders in a letter.

However, he noted, his family has been in business for a long time and has overcome “wars, revolutions, crises and pandemics.”

Elkann’s resolve comes in the face of numerous big money deals including the sale of its 100% stake in reinsurer PartnerRe to France’s Covea for $9 billion.

EXOR acquired PartnerRe in 2016 for a cash consideration of $6.72 billion, so the sale to Covéa represents a roughly 30% profit for the Italian holding company.

It has been noted that the tumble in share prices triggered by the pandemic has shaken the multiples underlying the forthcoming deals for EXOR, potentially leading to rediscussion of their terms.

Other deals include a proposed merger between Exor-controlled Fiat Chrysler FCHA.MI and France’s PSA PEUP.PA, which includes a 5.5 billion euros special dividend for Fiat Chrysler’s (FCA) shareholders.

Additionally, there’s a potential spin-off and listing of truck, bus and powertrain businesses from CNH Industrial CNHI.MI.

Despite obvious difficulties proposed by the current pandemic, Elkann believes glimmers of hope suggest that “we will eventually be able to start a return to some kind of normality.

“But there can be no arbitrage between people’s health and the health of the economy. Without the former we can never have the latter.”

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