French reinsurance firm SCOR, one of the largest reinsurers in the world, has turned down an acquisition approach from independent French insurance group Covéa.
Covea already has a stake in SCOR of just over 8% and the firm had been looking to take out the rest of the reinsurer in a transaction at 43 Euros per share, in an approach made last month which Covea described as a “friendly merger”.
That price was a more than 20% premium to SCOR’s share price in August, representing an attractive premium, valuing the French reinsurer at just under $10 billion, although seemingly not attractive enough for SCOR.
Covea said it remains interested in a deal, or at least an amicable tightening of the relationship between the pair.
SCOR’s share price has soared since news of the approach by Covea emerged this morning, with its share price up more than 8% at 38.39 euros currently.
That’s still a considerable amount below the offer price from Covea though, which investors will be taking note of.
An acquisition of SCOR by Covea would be more a merger of diversified equals, as the Covéa Group is a leading French insurer with over 11.5 million policyholders and customers, commanding roughly €16 billion in premiums and €24 billion of eligible capital.
Putting that together with the reinsurance might of SCOR would create a compelling entity at this time when global diversified re/insurers are considered to have the best chances of riding out the structurally evolving reinsurance cycle.
Of course SCOR is already a powerhouse in its own right and may feel it does not need to be the approached party, but it will be interesting to see whether this triggers another spate of interest in tie-ups nearer the top of the reinsurance market tower, as scale and diversity continue to be the target.
SCOR has yet to comment on the matter.