ISS advises Aspen shareholders to snub Endurance

Advisory firms Institutional Shareholder Services (ISS) and Egan-Jones Proxy Services have bolstered Aspen’s defence by recommending shareholders reject Endurance’s proposals.

ISS, which provides corporate governance solutions for asset owners, investment managers, and asset service providers, said that the proposals would cause “unnecessary costs” for both shareholders, without providing “equivalent benefit” to Aspen shareholders.

According to a report issued by ISS, there are costs involved for the company and thus shareholders, in calling a proposed EGM to increase the size of Aspen’s board – which could ultimately enable Endurance to propose enough candidates to take control of the board – that need to be balanced against the benefits of this option.

“Even if the proposal to increase the board size is eventually approved assuming the EGM is called, there is not a practical implication for the takeover: if, by contrast, Aspen shareholders wanted to send a message to their board to engage with Endurance, they could simply tender their shares to Endurance, which would have a more immediate effect of demonstrating their views yet would not irrevocably commit them to a transaction at the current offer price, given Aspen’s poison pill,” said the report.

The second proposal involves Endurance applying to the Supreme Court of Bermuda to order a courtordered meeting at which Aspen common shareholders would consider and vote on a scheme of arrangement.

“Endurance believes that endorsement from one 15 percent of Aspen’s outstanding shares would demonstrate sufficient support from to persuade the court to order the meeting be called. There is no legal requirement or precedent which delineates this percentage be achieved, however,” said the report.

Chris O’Kane, Aspen’s chief executive officer, said: “We are pleased that ISS and Egan-Jones agree with our position and are recommending that Aspen shareholders reject both of Endurance’s proposals. Rather than offering real value, Endurance is pursuing coercive legal tactics in an effort to buy Aspen at the lowest possible price. We urge shareholders to reject both of Endurance’s proposals.”

The bidding battle between the two began in April when Endurance issued an unsolicited bid for Aspen.