(Bloomberg) -- Axis Capital Holdings Ltd. agreed to a 52%increase in the size of the dividend that PartnerRe Ltd.shareholders would get before their planned merger, seeking to fendoff a hostile bid for the reinsurer from Exor SpA.

The dividend was raised to $17.50 from $11.50, Bermuda-basedPartnerRe and Axis said Thursday in a statement.

Exor is seeking to buy PartnerRe for cash and has been improvingterms since making its initial unsolicited bid to break up thecompany’s deal with Axis, a Bermuda-based insurer. Turin-based Exorhas offered $6.8 billion, and said last week that it would lift thedividend rate on PartnerRe preferred shares by one percentage pointand won’t call three series of the securities until 2021. Axis saidThursday that it would match Exor terms on preferred stock.

“The merger creates opportunities that neither company couldreally achieve on its own in the near-term -– including expensesynergies in excess of $200 million, significant capitalefficiencies, and incremental growth opportunities,” AlbertBenchimol, the chief executive officer of Axis, said in thestatement.

After Exor sweetened its offer terms and met with investors inNew York last week, Axis and PartnerRe postponed the date for theirshareholder votes on the merger to Aug. 7. The initial plan wasJuly 24.

“We believe that Axis-PartnerRe were caught off guard by theenhancements” that Exor made, Charles Sebaski, an analyst at BMOCapital Markets said in a July 10 note to clients. At the time,Sebaski expected the insurers would boost PartnerRe shareholders’dividend to as much as $14 a share.

PartnerRe rose 0.4% to $133.50 at 9:39 a.m. in New York, whileAxis slipped 1% to $54.75.

Exor advanced 2.2% in Italy. An Exor spokesman declined tocomment on the insurers’ new terms.

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