77 minutes | Apr 21st 2019

Mike Sapnar, CEO of Trans Re: There's always a Buyer and a Seller

My guest for this episode is Mike Sapnar, CEO of Trans Re, a 4.5 bn premium reinsurer based in New York City. For many in my business Mike needs no introduction: we cover what the differences are between insurance and reinsurance, what makes for good negotiators and what Mike learned going through an agonizing year or so while his company was in the spotlight, subject to friendly and hostile takeovers alike a few years back. I've never been anywhere near the pilot's seat during an all-or-nothing M&A roller coaster and Mike takes us through what he learned in those harrowing few months. 

David Wright:       00:58:09       Tell me something you learned.

Mike Sapnar:        00:58:10       So, um, first of all, I learned there are no mergers of equals. It doesn't exist in Wall Street parlance. There's always a buyer and a seller.

David Wright:       00:58:19       Yup.

Mike Sapnar:        00:58:20       And even though we were a bigger company, we were getting a premium. We were doing a book for book swap, but we were getting a well let's come back to that. We were getting, it was a book for a book deal. We were going to have seven of the nine top positions, um, reinsurance was going to be a dominant part of the portfolio. And we felt we weren't the seller at the end of the day. Cause we were, we were the bigger company.

David Wright:       00:58:56       This is the Allied World transaction.

Mike Sapnar:        00:58:57       Yes. Yep. We were a bigger company. The issue was is we were getting a bigger premium in the book for book value based on the market price. And so Wall Street kind of said, well Transatlantic is the seller, they're getting the bigger premium. Is that a big enough premium? Is there something else out there? Hmm.

David Wright:       00:59:12       What does it matter?

Mike Sapnar:        00:59:14       Why does that matter if you're the, if you're the seller?

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