John Elkann, who is offering $6.8 billion for a company that doesn’t have a permanent chief executive officer, plans to find a leader internally at PartnerRe Ltd. if he wins the bidding for the reinsurer.

“We always like to promote from within,” Elkann, the chairman of EXOR SpA, told reporters in New York Tuesday after a meeting with investors. “People who are running this business are a very good team.”

EXOR is known for industrial holdings such as a stake in FIAT Chrysler Automobiles NV. Elkann needs to assure investors that his firm is ready to run a reinsurer as Turin, Italy-based EXOR seeks to persuade PartnerRe shareholders to vote against a planned merger with AXIS Capital Holdings Ltd. at a July 24 meeting.

PartnerRe has been led by an interim CEO after the departure of Costas Miranthis in January, when the merger was announced. AXIS CEO Albert Benchimol is the former chief financial officer of PartnerRe and has been designated to lead the combined company. He’s said there will be opportunities to reduce expenses, an idea that has been challenged by EXOR.

“The company is a very good company as it is, and it can grow,” Elkann said of PartnerRe. “We have absolutely no calculations in why we should be reducing headcount.” He said that he’s been unable so far to meet with top PartnerRe management because of the reinsurer’s agreement with AXIS.

PartnerRe’s former CEO Patrick Thiele said last week that an EXOR deal would create more value and that AXIS’s cost- cutting plan could pressure sales. Reinsurers provide backup coverage to primary carriers.

Thiele had contacted PartnerRe Chairman Jean-Paul L. Montupet in January to offer assistance during the transition. He then volunteered to help Elkann after the Italian firm made an unsolicited bid.

Wall Street Investors

AXIS and PartnerRe, both based in Bermuda, seek to create the world’s fifth-largest property/casualty reinsurer through a merger that would diversify risks.

EXOR, the investment firm of the billionaire Agnelli family, released revised offer terms Tuesday to allow the target company to solicit bids and negotiate with other potential buyers if it accepts Elkann’s proposal. EXOR also said it would lift the dividend rate on preferred shares by one percentage point and won’t call three series of the securities until 2021.

“These improvements only strengthen the company’s probability of success in getting PartnerRe shareholders to vote against the merger with AXIS,” Charles Sebaski, an analyst at BMO Capital Markets, said in a note to investors.

–With assistance from Tommaso Ebhardt in Milan and Selina Wang in New York.

July 7 Revised Deal Terms

In addition to the enhancements to PartnerRe preferred shareholders described in the accompanying Bloomberg article, the enhancements for Common Shareholders are:

• A “Go Shop” Provision Allowing PartnerRe to Solicit Bids from Third Parties After Signing with EXOR

EXOR will permit PartnerRe to actively solicit bids, share due diligence materials and negotiate with third parties until August 31, 2015, so that shareholders have assurance that the EXOR Binding Offer remains the superior alternative for the company. During the “Go Shop” period, EXOR will reduce the termination fee to $135 million (2.0% of deal value). These changes will provide PartnerRe shareholders the certainty of a superior transaction at a price of $137.50 per share should other buyers not emerge or should PartnerRe face catastrophe losses or other book value losses.

• If PartnerRe is Not Obligated to Pay the Termination Fee to AXIS, EXOR Commits to Pass the Full Value ($6.39 Per Share) to PartnerRe Shareholders

As part of the AXIS transaction, PartnerRe and AXIS agreed to an aggressive termination and expense reimbursement fee of $315 million (over 4.5% of the deal value) to ward off potential bidders. This is worth $6.39 per share to PartnerRe shareholders. In the event both PartnerRe and AXIS shareholders vote down the PartnerRe/AXIS transaction, and hence this fee is not payable by PartnerRe, EXOR commits to pass this value on to PartnerRe shareholders in full, effectively increasing the value of its Binding Offer to $143.89 per share.

• Personal Commitment From John Elkann Underscores Regulatory Certainty in EXOR’s Merger Agreement

To underscore EXOR’s commitment to obtaining regulatory approval, today John Elkann provided PartnerRe with a legally binding personal commitment to provide the information necessary to obtain such approvals. This action should put to rest the unfounded concern that all necessary regulatory filings will not be made.

Source: EXOR