News of the mammoth takeover bid, which would have been one of the industry’s biggest deals in years, first broke on March 18. Bloomberg reported that Chubb had offered $65 a share for the longstanding P&C insurer, which has roots tracing back more than 200 years.
The Hartford confirmed it had received an “unsolicited” non-binding takeover proposal from Chubb, which its board of directors was “carefully considering … with the assistance of its financial and legal advisors”.
While the Hartford’s rejection is a knockback for Chubb CEO Evan Greenberg, who is seeking to expand Chubb’s capabilities in the market for small-business coverage and add a fund manager and employee-benefits operation, there might be opportunities for the insurance behemoth to sweeten the deal.
As reported by Bloomberg, David Havens, a credit analyst at Imperial Capital, said in a note to clients: “Obviously, the Hartford board is underwhelmed by Chubb’s offer. But, Chubb could certainly come back with sweetened deal terms.” On a similar vein, analysts including Wells Fargo & Co.’s Elyse Greenspan said in notes last week that the initial $65-a-share offer was probably “too low.”
The deal, if it ever comes back to the table, will be one of Greenberg’s most significant transactions, coming close to Chubb’s near US$30 billion combination with Ace Ltd. in 2016.