(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
NEW YORK (Reuters Breakingviews) - Concise insights on global finance.
OVER-INSURED. Chubb Chief Executive Evan Greenberg went back to rival Hartford Financial Services two more times https://ir.thehartford.com/press-releases/press-release-details/2021/The-Hartford-Announces-First-Quarter-2021-Results-And-Financial-Targets/default.aspx after an initial unsolicited offer of $65 per share in March. Harford said on Thursday it had rejected those offers too – at $67 and $70 a share – and suggested it is worth more.
Breakingviews reckons synergies from a merger might be worth around $7 billion. That means in theory they could justify a premium of about $20 per Hartford share. So far, Chubb’s best offer is about $15 above Hartford’s undisturbed value, nearly a 30% premium.
On that simple math, Chubb has room to go to around $75. The $74 billion company has said, however, that it will be disciplined https://investors.chubb.com/investor-relations/media-center/press-releases/press-release-details/2021/Chubb-Statement/default.aspx and investors have sent its shares down around 5% since March. And some analysts peg Hartford’s worth at $80 per share or more. In a conservative industry, Greenberg is already out on a limb making an unsolicited bid. It might be a step too far to bridge the gap. (By Jennifer Saba)
On Twitter http://twitter.com/breakingviews
Earlier in Capital Calls:
Private pools boom
The less flashy end of green investing
American Airlines lightens the losses
Europe IPOs get a qualified tech boost
Canberra looks game for more brawling with Beijing
(SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS: http://bit.ly/BVsubscribe; | Editing by Richard Beales and Amanda Gomez)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.