Aspen and Endurance clash over shareholders’ views of takeover bid

Aspen Insurance says it has found an “overwhelming consensus” among its shareholders to reject Endurance’s $3.2bn bid for the company.

But Endurance has accused Aspen of trying to distort comments by its chairman and chief executive John Charman and that shareholders of both companies it has approached agree that the combination of the companies would make sense.

The two Bermuda-based companies have been at odds since Endurance revealed its $47.50-per-share hostile takeover bid at the start of last week.

The plan, which will be in place for one year, will give shareholders rights allowing them to buy Aspen stock at discounted prices, if a person or group acquires 10% or more of the company. For passive, institutional investors the threshold is 15%. The move is designed to significantly increase the cost of a hostile takeover.

Aspen said chairman Glyn Jones and chief executive Chris O’Kane had written to shareholders yesterday detailing why Aspen’s board had rejected the cash-and-stock bid by its Bermuda rival.

“Since Endurance publicised its letter to Aspen on 14 April, we have reached out to shareholders and have found overwhelming consensus for our rejection of Endurance’s ill-conceived ‘proposal,’ which undervalues Aspen, represents a strategic mismatch and carries significant execution risk,” Jones said. “Furthermore, our discussions with clients and brokers have confirmed our view that the combination would result in substantial dis-synergies.”

The letter also said: “We have serious concerns about the significant personnel disruption and loss of attractive business that would result from a combination of Aspen’s collaborative, teamwork-oriented culture with Endurance’s centralised, top-down management model.

“Endurance’s recent description of its ‘collegial environment’ is inconsistent with the industry’s experience. Aspen is currently in litigation as a result of Endurance’s orchestrated poaching of Aspen employees, and, according to news reports, Mr Charman was relieved of his positions at his last two companies for his less than collegial attitude – reportedly leaving Ace due to ‘personal differences’ and Axis when the ‘board kicked him out in 2012 without cause’ (SNL Insurance Daily, 23rd August 2013).

“Yet, now, Endurance assures our and its own shareholders that a business where the most valuable assets are its people will thrive, and that the merging of the two cultures will proceed smoothly, in the ‘collegial environment’ established under Mr Charman’s leadership.”

Endurance dismissed Aspen’s statement as “defensive” and hit back at the comments on the organisation’s culture, pointing out that senior staff had been recruited during a major overhaul of the company over the past year.