John Charman, Endurance's chairman and chief executive, claims that Aspen’s shareholders are increasingly frustrated with their board’s refusal to consider Endurance’s offer for the company and he can still win the battle to acquire the company after months of what has become an increasingly acrimonious war of words between the two businesses.
Charman was responding after Aspen Insurance’s board of directors again officially rejected Endurance’s bid to buy the business, urging its shareholders to reject the involuntary scheme of arrangement Endurance is now pursuing describing the tactic as a “desperate attempt to force through an inadequate offer for the business”.
Endurance first made its $3.2 billion bid for the company earlier this year. Since then, an increasingly bitter war of words has developed between the two companies with Aspen’s board repeatedly rebuffing the advances but Endurance seeking to force through the proposal.
On June 9, 2014, Endurance commenced an exchange offer for all of the outstanding Aspen common shares for $49.50 per share in cash and Endurance common shares. It also initiated legal moves to use an involuntary scheme of arrangement to force a meeting of Aspen shareholders at which they would vote on the offer.
“We know from our extensive engagement with Aspen shareholders that many have been frustrated by the dismissive and entrenched response of Aspen's board and management to the significant opportunity for value creation that Endurance has proposed,” Charman said.
“The announcement made by Aspen today in response to our transaction proposal and exchange offer is simply more of the same – a self-interested cadre of Aspen insiders taking every action in their power to deny their own shareholders, the true owners of the company, the opportunity to realise the compelling value we have proposed.
"Perhaps it should come as no surprise that Aspen's board and management are not aligned with the best interests of their shareholders given they collectively own less than 1.2 percent of Aspen.
"Despite the heated rhetoric Aspen has directed at Endurance, Aspen's board and management have presented no credible plan to deliver value that can compete with what we are offering, which represents a 19.5 percent premium over Aspen's previous all-time high share price and at a 1.16x multiple of March 31, 2014 book value is a 13.8 percent premium over Aspen's highest previous book value multiple (1.02x) over the past 5 years. What Aspen's board and management have failed to achieve for ten years, we are prepared to deliver today.
"We urge Aspen shareholders to speak forcefully by supporting our two shareholder proposals - calling for a special general meeting to increase the size of the Aspen board, which will lead to a majority of Aspen's directors standing for election at its 2015 annual general meeting, and endorsing the pursuit of a court-sanctioned scheme of arrangement.
"We are truly committed to pursuing these and any other actions and are determined to see them through in order to provide Aspen shareholders the ability to realise the highly attractive premium our proposal represents.”
Aspen, Endurance, North America, John Charman