Endurance Specialty withdraws offer to acquire Aspen Insurance

Endurance Specialty Holdings Ltd. recently withdrew its US$3.2 billion offer to acquire Aspen Insurance Holdings Ltd., whose board of directors rejected the takeover offer this past April.

Pembroke, Bermuda-based Endurance initially announced April 14 a proposal to acquire Aspen’s shares for $47.50 each and later increased that offer to $49.50. All figures are in United States dollars.

Endurance announced July 30 it is terminating its offer, less than a week after Aspen reported most of its shareholders voted against an Endurance proposal for a court-ordered shareholder meeting. Endurance’s proposal to acquire Aspen was not put to Aspen shareholders for a formal vote.

Endurance provides a variety of primary insurance coverages, including professional lines, property, agriculture, casualty, inland and ocean marine, healthcare, global weather, surety bond and contract binding operations. Endurance also provides reinsurance, including catastrophe, property, casualty, professional lines and other specialty lines.

Hamilton, Bermuda-based Aspen writes insurance in Canada through its subsidiary, Aspen Insurance UK Ltd. The company does not have a physical presence in Canada but a Toronto attorney acts as Aspen’s agent in Canada. Endurance no longer has an office in Canada but “will insure risks in Canada when permissible pursuant to both federal and provincial law,” a company spokesperson earlier told Canadian Underwriter. In addition to reinsurance, Aspen provides primary insurance, including property, casualty, marine, aviation, energy, construction, financial and professional lines.

On April 14, Aspen announced its board of directors unanimously rejected the acquisition offer from Endurance, claiming, among other things, that Endurance’s proposal “undervalues” Aspen and that it “represents a strategic mismatch.”

On the afternoon of Aug. 6, Aspen were trading at $39.66 on the New York Stock Exchange.

On June 18, Endurance announced it was mailing letters with white cards to Aspen shareholders, asking them to vote to support a court-ordered meeting of Aspen shareholders “to consider and vote” on a scheme of arrangement. Endurance also recommended Aspen shareholders vote to “authorize the requisitioning of a special general meeting of Aspen shareholders to increase the size of Aspen’s board from 12 to 19 directors.” This would mean that a majority of Aspen directors would then stand for re-election at Aspen’s 2015 annual general meeting.

On June 27, Aspen said it was sending its shareholders a “blue card” asking them to reject Endurance’s proposals.

On July 25, Aspen announced the “preliminary results” of the shareholder vote, reporting it “believes that shareholders owning at least 76% of Aspen’s outstanding shares did not support Endurance’s proposal to call a special meeting at which shareholders would vote on a proposal to increase the size of Aspen’s Board to 19 directors.” Aspen also said shareholders holding at least 81% of Aspen stock shares did not support a court-mandated meeting.

So Endurance announced July 30 it “will not be pursuing its board size increase and scheme of arrangement proposals” and will ask its exchange agent “to promptly return all Aspen common shares to tendering shareholders.”

In an earlier filing with the United States Securities and Exchange Commission, Endurance said that under the terms of its exchange offer, each Aspen share could be exchanged for either; US$49.50 in cash; 0.9197 Endurance shares; or a combination of 0.5518 Endurance shares and US$19.80 in cash. That offer would have expired Aug. 29.