U.S. property and casualty insurer The Hartford has rejected further unsolicited acquisition proposals from re/insurer Chubb, which in turn has expressed disappointment over a lack of engagement.
Alongside the release of its first-quarter 2021 financials today, The Hartford has announced the receipt and rejection of two additional acquisition offers from global insurer and reinsurer Chubb.
In a letter dated March 30th, 2021, Chubb told The Hartford it was willing to offer “in excess of $67 per share” to acquire the company, if The Hartford engaged in “meaningful discussion and due diligence.”
Then, in a letter dated April 14th, 2021, Chubb increased its offer to “$70 per share, the top end of our range,” payable approximately 60% in cash and 40% in Chubb stock, reports The Hartford.
“The Hartford’s board of directors, after consultation with its financial and legal advisors, unanimously rejected both proposals, determining that entering into discussions regarding a strategic transaction would not be in the best interests of the company and its shareholders. The board also unanimously reaffirmed its conviction and confidence in The Hartford’s strategic business plan,” says the company.
Both offers are some way above Chubb’s initial $65 per share offer on March 11th, 2021, which valued the firm at around $2.5 billion higher than The Hartford’s $20.7 billion value at opening on the day before Chubb confirmed its proposal (March 18th).
Although, it’s worth noting that reports of a potential deal pushed The Hartford’s shares up by 19% during the day.
After Chubb confirmed its initial proposal on March 19th, 2021, The Hartford’s Board of Directors unanimously rejected the offer, stating at the time that entering into discussions over a deal would not be in the best interests of the firm and its shareholders.
In response, Chubb said it was “disappointed” by The Hartford’s decision while media reports discussed the potential for other buyers to enter the fray or for Chubb to increase its offer.
So, it’s now been confirmed by The Hartford that Chubb did return with two additional and improved acquisition proposals, although neither of these were enough to strike a deal.
Also, today, Chubb has released a statement expressing its disappointment over a lack of response from The Hartford following its proposals.
“We have believed that a consolidation of our two organizations, on terms that recognized The Hartford’s fair value, would be financially and strategically compelling for both sets of shareholders.
“Nonetheless, The Hartford has chosen not to engage in response to any of our proposals,” says Chubb.
Chubb continues to state that the “path to a transaction would have been engagement coming from The Hartford on the terms of our last proposal.”
“Although we are disappointed, we want to repeat that our shareholders demand of us, and we demand of ourselves, that we remain a disciplined acquiror.
“Chubb is well positioned. Our organization has been and remains totally focused, capitalizing on excellent P&C market conditions and executing our longer-term operating strategies.”