Unrelenting Endurance woos Aspen shareholders

The increasingly bitter battle between Endurance Specialty and Aspen Insurance has taken a new turn with Endurance formally writing to Aspen’s shareholders asking them to vote in favour of 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 the recent letter, which is extremely critical of the Aspen board, Endurance asks shareholders to vote for two proposals that would increase the size of Aspen's board of directors from 12 to 19 directors and to authorise support for the proposal of a Scheme of Arrangement by Endurance.

In a lengthy and detailed note to shareholders, Endurance accuses the Aspen board members of sticking their heads in the sand and of protecting their own interests ahead of the company’s shareholders.

Separately, Aspen has written to shareholders asking them to refute the proposals again describing the Endurance offer as being unattractive and representative of an increasingly desperate strategy by the Bermuda company (see separate story).

The Endurance letter, signed by Endurance chairman John Charman, states: “This summer marks an important juncture, as you have the opportunity to help determine the future direction of your company. Endurance has proposed to acquire all of the common shares of Aspen for a highly attractive premium and a compelling opportunity for future value creation.

“The board and management of Aspen have stuck their heads in the sand, refusing to engage in any discussions with us regarding our proposal. Instead, they are asking you to forsake immediate premium value for your Aspen shares for an uncertain future led by a board of directors and a management team more interested in protecting their personal interests than creating value for you - Aspen's shareholders.

“We are not asking you to vote at this time on whether to accept Endurance's proposal, but rather to answer two fundamental questions regarding the future of your company: does your voice - the voice of the true owners of Aspen - deserve to be heard on a question as important as the proposal made by Endurance? Is now the time to end the Aspen board's campaign of entrenchment and shareholder disenfranchisement - highlighted by its track record of underperformance and consistently poor corporate governance that thwarts the wishes of its shareholders?”

The letter also adds: “The degree of entrenchment that has been displayed by Aspen's board and management is astonishing. Their refusal to engage with Endurance is a clear abdication of their responsibility to you, although it is not surprising given the history of the Aspen board and management consistently acting in their own - and not their shareholders' - best interests.

“Consistent with their general disregard for good corporate governance, when presented with a compelling proposal from Endurance, Aspen's board members and management did nothing to advance your interests, and are doing everything within their power to protect their own positions. Endurance, on the other hand, remains fully committed to delivering its highly attractive premium and compelling opportunity for future value directly to Aspen shareholders.”