Hartford rejects Chubb’s $23 billion takeover proposal

The response puts pressure on Chubb CEO Evan Greenberg to sweeten the offer as he seeks to beef up Chubb with Hartford's small-business coverage, fund manager and employee benefits unit.

Hartford Financial Services Group Inc. rejected a $23 billion takeover proposal from Chubb Ltd., putting pressure on Evan Greenberg to sweeten the offer as he seeks to further beef up his sprawling insurer.

Hartford’s board “determined that entering into discussions regarding a strategic transaction would not be in the best interests of the company and its shareholders,” the company said in a statement Tuesday. “The board reaffirmed its commitment and resolve in the continued execution of the Hartford’s strategic business plan.”

Chubb had offered $65 a share for the Connecticut-based insurer, disclosing the proposal last Thursday after an earlier Bloomberg report, and Hartford then confirmed its board was reviewing the offer. The rejection complicates the pursuit of Hartford by Greenberg, Chubb’s chief executive.

The purchase would help his company expand in the market for small-business coverage and add a fund manager and employee-benefits operation.

“Obviously, the Hartford board is underwhelmed by Chubb’s offer,” David Havens, a credit analyst at Imperial Capital, said in a note to clients. “But, Chubb could certainly come back with sweetened deal terms.”

“It’s doubtful Chubb will walk away from a potential acquisition of Hartford despite the rejection of its $65-a-share bid,” said Matthew Palazola, senior insurance analyst at Bloomberg Intelligence. “We believe CEO Evan Greenberg sees significant value in expanding Chubb’s small and midsize commercial reach and keeping this business from competitors like Travelers.”

Analysts including Wells Fargo & Co.’s Elyse Greenspan said in notes last week that the initial $65-a-share offer was probably “too low.” Hartford shares fell 0.5% to $66.95 at 9:53 a.m. in New York. Chubb rose 0.5% to $157.85.

The deal would have been one of Chubb’s largest since Greenberg fused Ace Ltd. with Chubb Corp. in 2016. Hartford has been derisking in recent years, shedding an annuity operation, but the stock was beaten down last year with shares underperforming the S&P 500 Index as the pandemic and resulting lawsuits over business-interruption coverage weighed on the insurer.