Aspen warns shareholders on ‘wasteful’ Endurance bid

Aspen Insurance has again written to its shareholders beseeching them to reject moves by Endurance to force a special general meeting that would pave the way for Endurance to buy the company.

In the letter, Aspen describes the offer Endurance has made for the business as “inadequate”, especially in light of Aspen’s strong operating results and increasing book value this year, and its legal tactics as being “wasteful” and designed to create a false sense of urgency.

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.

The letter, signed by both Aspen chairman Glyn Jones and its chief executive Chris O’Kane, states: “Endurance Specialty Holdings continues to pursue its inadequate offer for your company, Aspen Insurance Holdings – an offer that has become even weaker as a result of Aspen’s strong operating results and increasing book value.

“Endurance is engaging in wasteful and coercive legal tactics as a desperate attempt to create a false sense of urgency among Aspen shareholders and force through its inadequate proposal.”

It goes onto make several points designed to make the case for its shareholders sticking with it as a standalone entity.

It says it is delivering on a clear plan that is generating strong financial results, including approximately 9 percent growth in book value per share since the beginning of this year.

It says that Endurance’s offer, which it calls inadequate from the start, has become increasingly deficient as a result of Aspen’s strong operating results. Endurance’s offer is now approximately 1.1 times Aspen’s book value.

It describes Endurance’s stock – which makes up 60 percent of its offer – as a “highly unattractive currency” and calls Endurance’s earnings as “low-quality” and “significantly dependent on reserve releases”.

It also stresses that three separate independent governance advisory firms – Institutional Shareholder Services, Glass, Lewis & Co, and Egan-Jones Proxy Services – have recommended that Aspen shareholders reject Endurance’s proposals.