Aspen takeover may fail in case of large cat loss
The takeover of Aspen Insurance Holdings by alternative investment manager Apollo may fail if the Bermuda-based insurer is hit by large cat losses.
Apollo is offering $2.6 billion to buy Bermuda-based Aspen Insurance Holdings and take the carrier private.
The deal involves an agreement and plan of merger among Aspen, Highlands Holdings and Highlands Merger Sub , a wholly-owned subsidiary of Highlands Holdings.
The agreement can be terminated by Highlands Holdings if Aspen suffers losses exceeding $350 million resulting from certain catastrophic events occurring between July 1, 2018, and Jan. 31, 2019.
Between July and December 2017 Aspen reported a net loss of $438.7 million, driven by losses from hurricanes in North America.
If the merger agreement was terminated, under circumstances including a termination by Highlands Holdings in the event of a change in the recommendation of Aspen’s board of directors or termination by Aspen in order to enter into an alternative acquisition agreement with respect to a “superior proposal”, Aspen is required to pay Highlands Holdings a termination fee of $82.9 million.
The agreement also requires Highlands Holdings to pay Aspen a reverse termination fee of $165.9 million if the merger agreement is validly terminated for Highlands Holdings’ failure to close when required to do so, or in case of a material breach by Highlands Holdings of its obligations.
Get all the latest re/insurance industry news with our daily newsletter - sign up here.
More of today's news
Lemonade, Metromile, Root struggle to reach underwriting profits
NFIP likely to trigger reinsurance programme due to Hurricane Lane
Insurtech CyberCube taps Swiss Re veteran for board
Peak Re expands Asian business in H1
Hiscox Re & ILS appoints new North America chairman
More articles
Copyright © intelligentinsurer.com 2024 | Headless Content Management with Blaze