(Bloomberg) -- PartnerRe Ltd. is betting the value of a merger with Axis Capital Holdings Ltd. is worth more in the long run than an extra few dollars a share now. Shareholders may not agree.

The Bermuda-based reinsurer on Monday chose a sweetened agreement with Axis -- valuing PartnerRe at about $126 a share, according to analysts -- over a $130 cash bid from Exor SpA. The new terms with Axis include an $11.50-a-share one-time special dividend to supplement what had been an all-stock transaction.

PartnerRe says the gap between the two proposals isn’t as wide as it seems because the combination with Axis will create a much stronger entity that can better compete in an overcrowded reinsurance market. Exor, the investment fund controlled by Italy’s Agnelli family and known for its stake in carmaker Fiat Chrysler Automobiles NV, doesn’t have significant reinsurance operations so it can’t offer the same synergies.

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