Aspen board begs shareholders to dismiss Endurance bid

The board of Aspen Insurance has written to the company’s shareholders recommending they reject Endurance’s attempt to force a special general meeting that would pave the way for Endurance to buy the company.

Endurance made an unsolicited £3.2 billion bid for Aspen earlier this year, which was rejected by the insurer’s board. Since then, the two companies have engaged in a very public war of words as they battle to win the confidence of Aspen’s shareholders.

In its letter, the company’s board describes Endurance’s bid as a hostile campaign designed to secure the acquisition of Aspen at the lowest possible price. It says the headline acquisition price Endurance has been citing is misleading and it again highlights the progress Aspen has been making and its potential for future growth.

“We write seeking your support in rejecting two shareholder proposals put forth by Endurance Specialty Holdings, which has launched a hostile campaign to acquire your company on highly unattractive terms,” the letter said.

“Endurance’s proposals ostensibly relate to the calling of a special meeting and to support a convoluted legal strategy Endurance has said it will pursue with the Bermuda Supreme Court. Do not be misled. These coercive legal tactics are attempts by Endurance to acquire Aspen at the lowest possible price.

“Endurance is desperately pursuing these tactics because time is not on its side – Aspen’s business continues to strengthen. In fact, Endurance’s “revised offer” is worth even less than its initial offer based on the increase in Aspen’s book value and decrease in Endurance’s stock price since its initial proposal. We urge you to reject Endurance’s coercive tactics to force through its inadequate offer.”

It goes onto explain why it believes the bid is unattractive and misleading. “Endurance is touting a ‘headline price’ for its offer that simply does not exist,” it said. “Endurance has been publicly stating that it is offering ‘$49.50’ per share – but based on the offer’s proposed exchange ratio and mix of cash and stock consideration as of the market close on June 26, 2014, the value of the offer is only $47.64 per Aspen share, and the value of an all stock election in the offer is worth only $46.40 per Aspen share.”

It also highlights the merits of Aspen as a standalone business. “Aspen is successfully executing on a strategic plan and we are confident that it will deliver superior value to Aspen shareholders. Aspen’s strategic investments in its business are paying off. The Company is on track to achieve its 10 percent operating ROE objective in 2014 and current analyst consensus for Aspen’s 2014 earnings per share has increased 18 percent year-to-date.”