According to details revealed in a public filing Monday, two parties approached XL Group for potential tie-ups before AXA started to pursue a deal—and seven, in total, were interested before AXA and XL agreed to a $15.3 billion deal in early March.

AXA eventually topped the next highest bidder by more than $2 billion with it’s $15.3 billion, or $57.60 per share all-cash offer. The first interested party, referred to as Party 1 in an April 16 XL Group proxy statement, was the next highest bidder, offering $50 per share (around $13 billion) in late February. That party, identified only as a “global insurance and reinsurance company,” had been engaged in discussions with XL since June 2017.

“The fact that between the first half of 2017 and the time of entry into the merger agreement with AXA, XL had discussions with six other parties and no other party had expressed a willingness to make an offer in excess of the $57.60 per common share AXA has agreed to pay” is one of the reasons the members of XL’s board give for urging shareholders to approve the deal with AXA in Monday’s filing.

Party 2, the second interested party to meet with XL to entertain a deal, was in and out of the picture in October last year, before AXA Chief Executive Officer Thomas Buberl sought a meeting with XL CEO Mike McGavick. Buberl made his move back on Nov. 7, 2017, when he met with a representative of XL’s financial advisor, Morgan Stanley & Co. LLC, and requested a meeting with McGavick following an unrelated board meeting for AXA US in New York, the filing says.

Another party, Party 4—a U.S. insurance company—put in a late bid of $10 billion to $15 billion after XL and AXA were already in advanced discussions with the $57.60 offer on the table.

“Given the current progress of discussions with AXA and Mr. McGavick’s and XL’s board of directors’ view of Party 4’s ability to effect such a transaction, discussions were not pursued with Party 4 and Party 4 did not seek to reengage with XL,” the filing states, recounting the events.

The Party 4 bid came on Feb. 25, 2018, four days after Buberl phoned McGavick with the preliminary confidential $57.60 per share bid and two days after it was put in writing and XL opened up its electronic data room to facilitate AXA’s due diligence. Also on Feb. 23, McGavick “called Party 1, and determined, based on that call, that it was unlikely that Party 1 would continue to pursue a transaction given the price that had been offered by AXA.

“In addition, in light of the non-binding offer received from AXA and AXA’s proposed accelerated timeframe, the determination was made not to seek to pursue an ongoing dialogue with any of Party 2, Party 5 or Party 6 at that time.”

Sorting Out the Parties

The proxy statement doesn’t reveal the identities of any of the parties involved by name, and only briefly mentions a Bloomberg article which revealed Allianz as one of the suitors. “On February 7, 2018, Bloomberg published a news article, citing unnamed sources, that XL was attracting interest from other insurance and reinsurance companies, including Allianz SE. AXA was not named in the Bloomberg news article,” the filing says.

Was Allianz one of the other parties? Or had Bloomberg gotten the wrong information?

A subsequent post-deal Bloomberg article, published in early March, described late January meetings between executives of AXA and XL at a romantic Swiss hotel on the shores of Lake Zurich, and also named Hartford Financial Services Group as an interested party that “had held informal talks on and off again with XL for about two years.”

Party 4 perhaps?

The proxy statement gives few clues, revealing only that two of the parties were insurers—one global and one U.S.—and four were global hybrids that write both insurance and reinsurance.

Here’s what else the filing reveals about each party:

• Party 1, a hybrid, came on the scene in mid-2017. This party introduced the idea of a potential strategic transaction with XL. XL then entered into a confidentiality agreement including a standstill with Party 1 in June 2017. At the time, XL’s board of directors continued to endorse a standalone strategic plan for XL, but still authorized XL’s management team to engage in discussions at its discretion. Discussions continued until McGavick received the $50 per share (roughly $13 billion) preliminary and non-binding offer on Feb. 20, 2018—a figure too low to consider based on guidance from XL’s board.

• Party 2, another global hybrid, requested a meeting with representatives of XL in October 2017. Although this party discussed a potential strategic transaction, the meeting did not develop into further discussions. McGavick reached out to Party 2 on Feb. 19, but Party 2 did not pursue conversations with XL any further.

• Party 3, a global insurance company, expressed an interest in discussing a potential strategic transaction, according to the filing which briefly notes that the XL board was apprised of this during a mid-December update from XL’s management team. The date of the expression of interest is not revealed in the filing, which notes only that the “inquiry was not subsequently pursued thereafter by Party 3.”

• Party 4, the U.S.. insurance company, was involved in “preliminary conversations” with XL or its representatives during the week of Feb. 5, 2018—”both prior and subsequent to the Bloomberg news article.”

• Party 5, a third global hybrid, was also involved in discussions with XL that week, through its representatives.

• Party 6, the fourth global hybrid, had preliminary discussions with Morgan Stanley acting on behalf and at the direction of XL.

Board Actions; $50 a No-Go Price

The filing discloses a timeline of meetings between XL and AXA starting with the first in-person meeting between McGavick and Buberl, set at Buberl’s request on Nov. 15, and leading up to various meetings in January and February between members of the two management teams to discuss some of the details of how the firms could be put together. Among matters discussed: How AXA’s existing businesses, including AXA Corporate Solutions (AXA’s large commercial P/C and specialty business) and AXA Art, could be combined with XL’s insurance businesses; how the combination would be messaged out to internal and external stakeholders; potential integration planning.

On Jan. 16, 2018, XL and AXA executed a confidentiality agreement, which did not permit AXA to make a formal proposal to acquire XL unless specifically invited to do so by XL. By early February, AXA had been invited to participate in a series of management meetings and discussions in order to fully develop a view of XL. Then, on Feb 20, a Morgan Stanley representative phoned Buberl to officially invite him to orally deliver a dollar-offer for XL, in order to compete with an non-binding offer that McGavick had received from “unspecified” Party 1 on the same day.

McGavick had already told Party 1 that XL’s board that it’s $50 per share offer was unlikely to pass muster with the board, as would any transaction at a price per share in the low $50s. McGavick has received pricing guidance from the board at a regularly scheduled meeting on Feb. 15.

“At this meeting, XL’s management team discussed XL’s 2018 business plan in light of January 1, 2018 renewals. While affirming XL’s 2018 business plan, XL’s board of directors authorized Mr. McGavick and XL management to continue discussions with AXA and continue discussions or engage with other potentially interested parties and discussed how to respond to indications of interest that could be received at a range of potential prices,” the filing said.

Throughout the time period described in the filing, starting with Party 1’s interest in mid-2017 through late mid-December, the filing notes that the board continued to endorse a standalone strategic plan for XL. But by mid-December, “the macro trends that the XL board of directors regularly considers as part of its strategic review, combined with the natural catastrophe losses in 2017, led to a heightened attention to XL’s potential strategic opportunities,” the filing says.

XL’s board includes Chairman Eugene M. McQuade, the Former Vice Chairman of Citigroup, as well as former CEOs of Hartford and AXA Group Germany, Ramani Ayer and Claus-Michael Dill.

Financial Terms

In addition to laying out the board’s rationale in now urging shareholders to vote in favor of a $57.60 per share deal, the filing necessarily contains Morgan Stanley’s opinion and financial analysis, including reviews of XL’s historical trading ranges, price-to-earnings (P/E) and price-to-book ratios of comparable companies, and comparable price-to-earnings multiples and premiums paid in precedent transactions of other companies, among others.

The AXA deal price exceeded most of the ranges of estimates determined by Morgan Stanley, in some cases by wide margins. For example, using a 2018 P/E range of 9.5-times to 11.5-times, Morgan Stanley calculated an implied per-share equity value range of $35.75 to $43.25 (based on consensus estimated operating earnings per XL common share of $3.75 from publicly available equity research analysts estimates available to Morgan Stanley as of Mar. 1, 2018).

Based on a review of premiums paid in other insurance and reinsurance transactions, Morgan Stanley applied a premium range of 20 percent to 35 percent to the closing price per XL common share of $37.34 on Feb. 6, 2018, deriving an implied per-share equity value range $44.75 to $50.50—the higher end coming in more than $7 per share below AXA’s offer.

Two other analyses came closer to AXA’s $57.60 per share offer:

• A dividend discount analysis, which resulted in an implied per-share equity value range at$48.00 to $57.25, placing AXA’s bid near the high end.

• An analysis based on the next 12 months of estimated earnings per share, for which Morgan Stanley calculated an implied equity value range of $52.50 to $67.50, placing AXA’s bid closer to the low end of the range.

In the end, the merger consideration of $57.60 per common share represented a premium of 54.3 percent to the closing price of common shares on Feb. 6, 2018—the last full trading day prior to the release of reports that XL was a potential acquisition target, the board of directors points out in the section of the proxy statement titled “The Merger—XL’s Reasons for the Merger and Recommendation of the XL Board of Directors.”

The AXA price also represents a premium of 33.0 percent to the closing price of common shares on Mar. 2, 2018, the last full trading day prior to the deal announcement.