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Chubb 'Disappointed' by Hartford's Rejection of Merger

Hartford rejected Chubb’s initial offer of $65 a share and then turned away two higher offers, $67 and $70 a share.
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Chubb  (CB) - Get Chubb Limited Report, the world’s largest publicly traded property and casualty insurer, expressed disappointment Thursday that Hartford Financial Services Group  (HIG) - Get Hartford Financial Services Group Inc. (The) Report has rejected its three buyout offers.

The Hartford, Conn., company last month rejected Chubb’s initial offer of $65 per share and then turned away from two higher offers, $67 and $70 a share, Hartford said in its first-quarter-earnings report.

“We have believed that a consolidation of our two organizations, on terms that recognized The Hartford's fair value, would be financially and strategically compelling for both sets of shareholders,” Chubb said in a statement Thursday.

“Nonetheless, The Hartford has chosen not to engage in response to any of our proposals. The path to a transaction would have been engagement coming from The Hartford on the terms of our last proposal.”

Further, “Although we are disappointed, we want to repeat that our shareholders demand of us, and we demand of ourselves, that we remain a disciplined acquirer,” Chubb said.

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Hartford shares recently traded at $66.47, down 1.5%. They have eased 1.2% over the past month.

Chubb, Zurich, recently traded at $168.10, up 1.8%. It has gained 5% over the past month amid the merger proposals. 

Morningstar analyst Brett Horn puts Chubb’s fair value at $157.

On March 23, after Hartford’s initial snub of Chubb, he wrote, “we would tend to view walking away as a positive for Chubb. 

"The proposed combination seemed to have some similarities with the successful ACE and Chubb merger, but we don’t think The Hartford is as strong a franchise, and the premium looked substantial.”