ZUG, Switzerland, Feb. 28, 2007 (PRIME NEWSWIRE) -- The management of Converium reaffirms today its unanimous support of the Board's decision to reject the unsolicited offer by SCOR, at CHF 21.1 per share, for the whole of the share capital of Converium, based on closing share prices at February 16, 2007, that was published on February 26, 2007.
The Board of Directors of Converium continues to believe that SCOR's acquisition currency is weak: based on today's closing share price of SCOR, the actual value of the SCOR offer equates to CHF 19.48 (exchange rate EUR/CHF 1.6125), failing to recognize Converium's stand alone franchise value.
Converium further informs that in light of the conditions to an upgrade of its financial strength ratings, it commissioned a study analyzing settlements of SEC investigations concerning financial and other performance data. The study analyzed settlements compared with market capitalization and prior year earnings in more than 100 cases between July 30, 2002 and February 20, 2007, including approximately 65 cases relating to companies with market capitalizations of less than US$5 billion. The settlements in those cases (US$5 billion market cap and under) ranged from US$0 to US$50 million. If the previously announced SEC inquiries regarding non-traditional insurance and reinsurance products were ultimately settled within that range, Converium does not believe that the ultimate resolution would have a material adverse impact on our financial strength.
However, Converium expresses no opinion and makes no prediction regarding the timing or substance, including amount, of the ultimate resolution of the SEC inquiry or whether and when we will achieve a ratings upgrade. Despite Converium's efforts to commission a comprehensive study, there can be no assurance that the study was entirely comprehensive. In addition, the SEC may, and likely will, consider factors other than market capitalization and earnings in determining the appropriate resolution of their inquiry and Converium cannot assure that this will not result in fines or penalties in excess of the range suggested by the study.
Converium has made it a policy not to provide any quarterly or annual earnings guidance and it will not update any past outlooks for full-year earnings. It will, however, continue to provide investors with perspectives on its value drivers, certain financial guidance for the full year, its strategic initiatives and those factors critical to understanding its business and operating environment.