PartnerRe jumped 8.8% to $129.65 at 1:49 p.m. in New York trading. That company closed at $119.14 Monday and $114.14 on the last trading day before the Axis agreement was announced.

Axis, also based in Bermuda, was little changed. Exor rose 0.4% at the close of trading in Milan, before the bid was announced.

Bridge Loan

Exor said it can pay with cash on hand and funds from a bridge facility and term loan from Citigroup Inc. and Morgan Stanley for as much as $4.75 billion. The Turin, Italy-based company said it has invested in insurance for more than two decades, including in PartnerRe's formation in 1993. Axis's Linda Ventresca and Drew Brown, a spokesman for PartnerRe at Sard Verbinnen & Co., didn't immediately return calls seeking comment.

"We do not believe it would be wise for Axis to engage in a bidding war," MKM Partners analysts led by Harry Fong said in a note to investors. "We place a high probability that PartnerRe's shareholders will vote in favor of selling to Exor." Axis would be entitled to a $250 million breakup fee if PartnerRe opted to go with Exor, they wrote.

Reinsurers take on some of the largest risks from primary carriers and can offer specialized coverage to commercial clients in industries such as energy and aviation. Their margins have been pressured in recent years by pension funds and Wall Street investors seeking to take on insurance risks, including those tied to the weather, that aren't correlated with financial markets.

'Sound Argument'

Axis and PartnerRe said when they announced their deal that it would create a company with a market value of about $11 billion that would be able to offer more to clients and benefit from economies of scale. Analysts including Josh Shanker at Deutsche Bank AG and Charles Sebaski at BMO Capital Markets questioned whether the Axis agreement was favorable for PartnerRe.

PartnerRe investors "have a sound argument that the current deal terms do not maximize shareholder value," Sebaski said in an April 8 note. The company's CEO, Costas Miranthis, stepped down when the deal was announced, and Axis's Albert A. Benchimol was chosen to lead the combined reinsurer.

Exor said it is best able to build PartnerRe by "focusing on its long-term prospects, better managing the volatility of the reinsurance cycle and proactively seizing market opportunities."

Exor said its bankers on the deal were Byron Trott's BDT & Co., Citigroup and Morgan Stanley. Its legal advisers are Paul, Weiss, Rifkind, Wharton & Garrison; Cox Hallett Wilkinson; and Pedersoli e Associati.

–With assistance from Noah Buhayar in Seattle and Zachary Tracer and Matthew Monks in New York.