March, 1998: ACE and Cap Re form a joint venture, ACE Capital Re, to write both traditional and custom-designed programmes covering financial guaranty, mortgage guaranty and a broad range of financial risks.

June 14, 1999: ACE offers to buy Cap Re for $606 million in stock, based on Cap Re's stock price, then at $22. Cap Re stockholders are to receive 0.6 ordinary shares of ACE for each share of common stock of Cap Re. Cap Re shareholders are to vote on the offer on October 7, 1999, following necessary regulatory approval.

June 15, 1999: Through its subsidiary, ACE Bermuda Insurance, ACE buys $75 million worth of Cap Re stock. It now owns 10 percent of the company. ACE also puts an additional $95 million into ACE Capital Re, the joint venture.

October 6, 1999: A day before the scheduled shareholders' meeting of Cap Re, XL Capital makes an unsolicited bid to buy the company, in an all-cash offer valued at $456 million.

October 7, 1999: ACE reiterates its interest in buying Cap Re.

October 9, 1999: XL enters into a confidentiality agreement with Cap Re relating to XL's offer.

October 10, 1999: ACE exercises its right to appoint two board members to Cap Re. ACE executives Frederic Dominico and Donald Kramer join the Cap Re board, bringing the number of directors to nine.

October 11, 1999: XL raises its offer to $13 per share and says it will pay a $25 million termination fee and set up a $50 million stand-by commitment for Cap Re if the XL bid is successful.

October 11, 1999: The Cap Re board considers XL's offer.

October 15, 1999: ACE sweetens its offer to $13 per share in cash and stock.

October 19, 1999: XL Capital raises its offer to $14 per share.