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Aspen, Endurance exchange fire in hostile takeover battle


Endurance Specialty Holdings Ltd. responded swiftly Monday morning to a letter from Aspen Insurance Holdings Ltd. to its shareholders on Sunday reiterating the reinsurer's criticism and rejection of Endurance's $3.2 billion hostile takeover offer.

Hamilton, Bermuda-based Aspen repeated its criticism and rejection of a $3.2 billion unsolicited proposal from Pembroke, Bermuda-based Endurance Specialty Holdings Ltd. in Sunday's letter, signed by Aspen Chairman Glyn Jones.

It was the company's latest salvo in an increasingly testy exchange between the companies since Endurance made its cash and stock offer last week after unsuccessfully attempting to court Aspen on a friendly basis since January, according to Endurance.

“Since Endurance publicized its letter to Aspen on (April 14), we have actively 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,” Mr. Jones said in a statement Sunday.

“Furthermore, our discussions with clients and brokers have confirmed our view that the combination would result in substantial dis-synergies,” he added.

Endurance responded quickly Monday.

“Having already rejected our proposal, Aspen's defensive statement simply repeats inaccurate characterizations and ignores the plain fact that we are offering its shareholders significant value for their shares and the opportunity to participate in a larger, superior organization going forward. This is another clear sign of an entrenched board and management that is not aligned with shareholder interests,” Michael J. McGuire, chief financial officer of Endurance, said in the specialty insurer's statement.


Endurance said Aspen's “vehement refusal … to consider its $3.2 billion proposal continues to deny its shareholders the ability to receive a highly attractive premium and an ongoing stake in a global industry leader.”

In Aspen's Sunday letter, Mr. Jones said the characterizations made by John Charman, chairman of Endurance, “are merely an attempt to deflect from the real point that the 'proposal' is unattractive and not actionable.”

Mr. Jones said that “Endurance significantly undervalues Aspen's business,” and that “Endurance stock as consideration in a combination is not appealing.”

The letter went on to say that Endurance “has an unattractive business mix and quality of earnings issues.”

“There are substantial risks regarding the supposed synergies,” Mr. Jones wrote, referring to the $100 million in synergies Endurance has claimed would result from the combination.

The Aspen letter also told shareholders that the culture clash between the two companies would result in “material personnel disruption and loss of business.”

In its Monday retort, Endurance continued to stress the premium it was paying for Aspen; its “alignment with shareholders,” noting that insider ownership at Endurance is 4.7% while it is only 1.4% at Aspen; and Mr. Charman's pledge to invest $25 million of his own money in the combined entity.