From the Financial Times:
Axa chief defends controversial XL Group deal
Thomas Buberl vows to convince investors over €12.4bn acquisitionThe other piece that seems to be highlighting an opportunity is March 27's:
The chief executive of French insurer Axa has admitted that it may take more than a year to convince investors that his €12.4bn acquisition of Bermuda’s XL Group is a positive move.
Thomas Buberl told the Financial Times that he understood investors’ concerns about what he described as a “strategic decision”.
When the French insurer announced the deal earlier this month its share price fell by a tenth, wiping almost €6bn off its market capitalisation. Its share price has struggled to recover since.
James Shuck, analyst at Citi, said the deal “looks expensive, increases earnings volatility, . . . raises financial risk and undermines management credibility”.
Some investors had expected the company to use the capital generated by the planned listing of its US business to fund small acquisitions of €1bn-€3bn and share buybacks, rather than to do big deals.
Mr Buberl said: “I understand the disappointment of investors from two perspectives. Despite the fact that I have always positioned share buybacks as the last option, a lot of investors thought [there would be] share buybacks.” He added: “On the deal size we did indicate that we were looking at smaller deals and when we indicated that . . . we clearly did not have XL in mind. It was a year or more ago. But when your ideal hits the reality, you sometimes have to take a strategic decision.” Mr Buberl said he would eventually convince investors that the deal was worthwhile: “Talking people around is difficult. You need to prove people around. It’s probably 12-18 months . . . When we spoke about this deal, it was clear that the market would not react positively.”...MORE