Exor pays dearly on the Stock Exchange (up to -6% to 44,45 euros) – in a day dominated by pessimism Milan and on the European squares – the step backwards by Covéa which, in the absence of a robust discount (two billion euros out of the nine already agreed), has decided to do not proceed with the purchase of Partner Re, the Bermuda reinsurer recommended to John Elkann by Warren Buffett himself. A bad blow, even if the analysts underline the financial solidity of the Agnelli holding company, traded on the market at a strong discount on the NAV and point out that a possible Elkann sale would have represented a bad precedent also for the FCA / PSA operation. But the split with Covéa, together with the difficulties encountered by the Iveco spin-off from CNH Industrial, chowever, it will oblige the holding to review the objectives. Also because it seems practically impossible to mend the gap with the French company, already held back by the perplexities of the Parisian market authority regarding governance and under the fire of Axa, which did not welcome the competitor's leap in size.
And now? The two contenders rule out new understandings or a division, Easier, therefore, than the matter ends up in the hands of arbitrators or courts who will have to establish the extent of the damages suffered by Exor which has already put its hands forward. “In an attempt to renegotiate the terms of the agreement – reads the note on the Agnelli safe. Covéa has never indicated the existence of substantial negative changes, including the risk of the pandemic”. Hence thea request for damages for a sum of several tens of millions of dollars, justified by the failure to sell one of the most important reinsurance portfolios in the world, the subject of a profound restructuring by Exor which had acquired it for 6 billion dollars in 2016. An unexpected slip, but sustainable without worry, as can be seen from the analysis by Mediobanca Securities which revised the target price this morning from 86 to 62 euros, maintaining a considerable margin of appreciation for the stock (potential + 32%, outperform opinion). The fact remains that, at least for a while, plans for new M&As will end up in the drawer.
