Scor denies takeover talks with Covéa

Scor denied takeover talks had taken place with Covéa after this publication revealed earlier today that the French mutual had renewed its 2018 bid to buy the reinsurer.

In a statement responding to inquiries from other media outlets, issued nearly 12 hours after Scor declined to comment on the story to Insurance Insider, the company said, “There have been no M&A discussions with Covéa in any way.” .

“Scor has strong growth prospects and is well positioned to create value for all stakeholders independently.”

French media reports citing “sources close to Covéa” also disputed the report of the talks.

The statement followed this publication’s report this morning, in a joint investigation with UK deal reporting website Betaville, that talks had taken place between the two sides. The story noted that options on the table included both a full takeover of Scor and taking a Covéa stake in a parallel structure with Talanx and Hannover Re.

Scor shares rose 6.3 percent to €19.88 ($21.92) after the report, compared with an earlier close of €18.70 on Monday.

In the report, this publication noted that the talks may seem incongruous to many, given the history between the two companies, which dates back to Covéa’s 2018 attempt to buy Scor.

The reinsurer is protected from a takeover by a seven-year standstill clause included in the 2021 peace agreed by the two carriers, but that would not prevent an amicable settlement.

This second approach comes amid an ongoing dispute between the pair over a retrocession agreement in which Covéa reinsures 30% of the life and health (L&H) business that Scor writes through its Irish entities.

Covéa’s second attempt also comes amid the reinsurer’s continued underperformance, with various remedial actions under new CEO Thierry Léger yet to change its share value and stubbornly low price-to-book ratio compared to of his colleagues.

In Scor’s Q2 results, it revealed a serious blow in the form of an operating loss of 227 million euros due to a negative insurance service of 400 million euros for the L&H segment.