Converium said its board of directors will urge shareholders to reject SCOR's tender offer, believing it fundamentally undervalues the company's growth prospects.
The Zug, Switzerland-based carrier said the company's recent plan will create a return on equity of 14 percent and create long-term shareholder value in excess of SCOR's price.
The offer of the Paris-based reinsurer represents only a 12.3 percent premium compared with the closing stock market price of Converium shares on Feb. 16, the insurer asserted.
SCOR offered to buy Converium in a deal that values the entire company at about $2.56 billion. The reinsurer already owns more than 32 percent of it and has set a May 22 deadline to acquire controlling interest.
“SCOR's hostile approach is unprecedented in the insurance arena. It entails significant business and integration risks in terms of staff and customer retention, which could mean a loss of up to $800 million in premium income,” Converium said in a statement.
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