16 July 2014 Insurance

Endurance: long term benefit will outweigh short terms costs

Endurance has responded to suggestions that shareholders will be hit by “unnecessary” costs if the company was to gain control of Aspen, by stating that the long term benefits to Aspen shareholders would significantly outweigh any short term costs.

Glass Lewis & Co, an independent, governance analysis and proxy voting firm and Institutional Shareholder Services (ISS), which provides corporate governance solutions for asset owners, have both raised concerns overs Endurance’s proposals towards an Aspen takeover saying that as well as additional costs, a special meeting would also cause distraction. Notably, neither Glass Lewis & Co nor ISS commented on the merits of the takeover itself.

Endurance made an unsolicited £3.2 billion bid, amounting to $49.50 per Aspen common share, earlier this year, which was rejected by the target’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.

Endurance has responded to these comments by saying that both companies are focusing on the incremental costs of the proposals, but failing to take into account that these costs would pale in line with the aggregated premium offered to Aspen shareholders as a result.

According to Endurance, the matter must be kept in context, especially with regard to the ways in which the company has gone about its offering.

Endurance says that Both ISS and Glass Lewis & Co indicated that the exchange offer was the preferred way for Aspen shareholders to express support, however, the scheme of arrangement proposal was intended to satisfy Bermuda law, which mandates a showing of shareholder support for the scheme.

Speaking to Intelligent Insurer, Endurance said that its disappointment surrounding the comments have come from the quick dismissal of the scheme of arrangement in light of the exchange offer, given that the exchange offer requires the support of the Aspen board.

According to Endurance, it is unclear whether the Bermuda courts would equate tendering shares in the exchange offer when demonstrating support for a scheme of arrangement.

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