The increasingly bitter public battle between the board of Aspen Insurance and Endurance over the latter’s unrelenting, unsolicited bid to buy Aspen has taken an even nastier turn with some of Aspen’s allegations getting personal.
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 latest letter to shareholders, in which it urges them to reject Endurance’s hostile overtures, the Aspen board claims that Endurance has poor corporate governance practices and highlights several reasons that Aspen shareholders should be concerned about the compensation practices of Endurance. It also singles out Endurance chairman John Charman for specific criticism.
Among other things, Aspen’s board accuses Endurance of granting outsized equity to executives with little regard to shareholder value, criticises the company’s governance structure which includes allowing John Charman to hold the roles of both chief executive and chairman and of ignoring the wishes of shareholders in granting what it calls excessive compensation packages.
The letter from the Aspen board also reiterates its view that Endurance’s bid is 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, accuses Endurance of employing coercive legal tactics and again highlights the progress Aspen has been making and its potential for future growth.
Endurance quickly responded to Aspen’s latest claims with a swift rebuttal. A spokesperson for Endurance said: “The ongoing rhetoric contained in Aspen’s letter about governance and compensation is a continuation of their efforts to deliberately distract Aspen’s shareholders from our proposed transaction – which provides a highly attractive premium and compelling value – in an attempt to prevent Aspen shareholders from having their voices heard.
“Noticeably absent from Aspen’s letter is any discussion of their long track record of poor operating performance under current management and dismal corporate governance practices.
“Aspen’s statements regarding John Charman’s compensation arrangements are clearly misleading. The facts are clear: no other CEO in our industry is aligned with shareholders like John Charman. He invested $30 million of his own capital in Endurance upon joining the company, committed to invest an additional $25 million in connection with the Aspen transaction and receives no base salary or other compensation, all of which is evidence that he is fully committed to the company as a shareholder on a long-term basis.
“We are confident that Aspen shareholders – who have overwhelmingly indicated their support for the transaction – will see through this smokescreen and vote to send a clear message to the Aspen Board that now is the time to engage with Endurance and to take concrete action towards realizing the compelling value of the transaction.”
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Aspen, Endurance, North America, Bermuda, John Charman