Axa Group of Paris said Friday that it is considering a binding offer for its reinsurance business from Paris Re Holdings Ltd., a company created by a consortium of international investors led by Trident III LP, a fund managed by Stone Point Capital LLC, in which Axa would take a 5% to 10% stake.
Other lead investors include Hellman & Friedman, Vestar Capital Partners, Crestview Capital Partners, ABN Amro, and New Mountain Capital. If Axa accepts the offer, the consideration would be about $146.4 million above the net assets transferred to Paris Re Holdings.
Under the offer's terms the business of Axa Re would be ceded in 2007 to Paris Re Holdings, with the risks attached to the 2006 claims experience of ceded business also accruing to Paris Re Holdings. Underwriting and claims for 2006 and prior years would continue to be managed by Axa.
Axa would guarantee the reserves pertaining to losses incurred on or before Dec. 31, 2005. Capital release would not be expected before 2007.
Paris Re Holdings plans to pursue the current strategy of Axa Re under the leadership of Hans Peter Gerhardt, Axa said. It has agreed to a period of exclusivity with Stone Point Capital and intends to respond to the binding offer after consulting with the relevant workers' councils.
