France’s Scor and Covéa have agreed a sweeping deal to end a no-holds-barred fight that began with a hostile bid and saw executives and bankers dragged through the courts.
The two companies have been locked in conflict ever since a failed 2018 takeover bid by mutual insurer Covéa was rejected by Scor, a global reinsurer.
This was followed by a series of lawsuits that centred on allegations that Covéa chief executive Thierry Derez had told his advisers about the reinsurer’s confidential plans to merge with PartnerRe, allegedly to quash the deal and help with his own merger plans. Scor chief executive Denis Kessler reacted with fury to the approach.
But, with lawsuits rumbling on and the French regulator pushing for the two sides to put enmity behind them, Scor and Covéa said in a joint statement on Thursday evening that they “wish to restore peaceful relations, based on professionalism and in keeping with their respective independence”.
The deal, which involves “no admission of liability on either side” involves Covéa agreeing to sell down its 8 per cent stake and give Scor the right to buy those shares for €28 over the next five years.
Scor can transfer those shares, which currently trade at €26.10, to a third party. Covéa’s offer for Scor in 2018 was at €43 a share.
Covéa has also agreed not to buy any Scor shares for seven years and must vote with the Scor board while it still has a stake. It also has to pay Scor a sum of €20m.
The quid pro quo is that all legal cases between the two sides will be stopped, sparing Derez further legal risk, and the two groups will start doing business together again.
One case that could still proceed is against Barclays, a Covéa adviser, which is due to begin next week in London.
“Barclays acquired, used and/or disclosed the trade secrets of Scor unlawfully in circumstances where it knew or ought to have known that it obtained the trade secrets from Mr Derez who had himself used or disclosed them lawfully,” Scor’s claim form at the High Court says.
Barclays denies the claims in the lawsuit. Derez has also consistently defended himself against the charges and was until this deal appealing with Covéa against a ruling in this case by a Paris court last year.
Another bank caught up in the crossfire was Credit Suisse which dropped Covéa as a client after a call between Kessler, who recently accelerated plans to step down as Scor CEO, and Tidjane Thiam, who ran the Swiss bank at the time.
Scor later won a case in London’s High Court to force Credit Suisse to hand over documents relating to the deal.