Aspen Rejects Increased Offer from Endurance; Proxy Fight Looms

Endurance Specialty Holdings increased offer to buy Aspen Insurance Holdings was rejected for the second time, but Endurance said it was willing to launch a proxy fight to get the deal done.

Endurance said on Monday it raised the offer by $2.00 to $49.50 per share, giving Aspen shareholders the option of taking cash or shares or a combination of both. The offer values Aspen at $3.2 billion.

Endurance said it would call for a special general meeting of Aspen shareholders, where they would consider a proposal to increase the size of Aspen’s board to 19 from 12 members. This would result in a majority of Aspen’s directors standing for election next year.

Aspen shares rose to as much as $46.85 on Monday. As of Friday’s close, they had risen nearly 17 percent since April 14 when Endurance first disclosed its unsolicited bid.

“In addition to grossly undervaluing Aspen, the proposal represents a strategic mismatch and, based on our conversations with major clients and brokers, would result in significantly greater dis-synergies than Endurance claims,” Aspen Chairman Glyn Jones said in a statement.

Reuters reported last month that Endurance was considering increasing its offer to acquire Aspen Insurance to around $50 per share.

Endurance said Morgan Stanley had committed to provide a $1.0 billion bridge loan to fund the takeover.

The company had previously said it would fund the acquisition partly through proceeds of $1.05 billion from a placement of new shares to investors led by CVC Capital Partners Advisory and its affiliates.

Aspen’s shares closed at $45.33 on the New York Stock Exchange on Monday.

(Reporting by Amrutha Gayathri and Anil D’Silva in Bangalore; Editing by Saumyadeb Chakrabarty)