Covea, which already owns an 8.2% stake in Scor, said in a statement that it had withdrawn its offer to pay €43 ($49.85) per Scor share, which valued the company at around €8.21 billion ($9.52 billion), but added it remained interested in buying the reinsurer in a friendly operation.
Scor confirmed in a statement that it had turned down the Covea offer saying the price offered didn’t reflect the intrinsic or strategic value of the company.
Investor expectations that a higher offer would be made for Scor, either by Covea or another bidder, pushed the reinsurer’s share price up 8.4% to €38.42. The cash offer for Scor represented a 21% premium over its Sept. 3 closing price.
“We believe that Scor should command a higher premium and we support management’s rejection of the offer,” said brokerage Jefferies in a note to investors.
Given market multiples and recent assets bought by Scor, Jefferies said it considered €45-€46 an appropriate price.
If Covea succeeds in acquiring Scor, it would create a major player in the European insurance market capable of swallowing smaller rivals as the industry consolidates.
Covea first bought a stake in Scor in 2003 and raised it to its current level in April 2016.
Covea said on Tuesday it could finance the acquisition with cash and financing through Barclays PLC and Credit Suisse Group AG.