Endurance Seeks Aspen Board Shakeup in Takeover Push

Endurance Specialty Holdings Ltd. is pushing to shake up the board of Aspen Insurance Holdings Ltd. after the directors rejected a $3.2 billion takeover offer.

Endurance raised its offer to as much as $49.50 a share from $47.50 and will push for a special meeting to increase the size of Aspen’s board to 19 from 12, the bidder said in a statement today. That would mean the majority of seats would be up for election in 2015, Endurance said. Aspen closed at $39.37 on the last day before the initial offer was announced.

Aspen has spurned Endurance, saying the would-be buyer has no experience making large transactions and that the two Bermuda-based insurers wouldn’t be a good match. Endurance has said its crop coverage would complement Aspen’s offerings in the Lloyd’s of London market.

“We will not be deterred by an entrenched board and management that refuse to engage productively on the merits of our compelling proposal,” Endurance Chairman and Chief Executive Officer John Charman said in the statement. “Actions we are announcing today demonstrate the absolute determination with which we are pursuing this transaction.”

Endurance said it has secured a $1 billion bridge loan from Morgan Stanley to help fund the deal. The company’s bankers on the offer are Morgan Stanley and Jefferies Group LLC. Skadden, Arps, Slate, Meagher & Flom LLP and ASW Law Ltd. are providing legal advice. Aspen said in April that its advisers included Goldman Sachs Group Inc.; Wachtell, Lipton, Rosen & Katz; and Willkie Farr & Gallagher LLP.

Cash, Stock

The revised offer is valued at about $35 million more than the April bid, a spokesman for Endurance said. The latest figure is based on a smaller number of Aspen shares and the calculation that 40 percent of the deal price will be in cash and the rest in Endurance stock.

Aspen said today that its board unanimously rejected the second offer. The effort to increase the size of the board is among “desperate and unusual legal tactics” pursued by Endurance, Aspen Chairman Glyn Jones said in a statement.

“Endurance’s revised proposal represents a backwards step,” Jones said. “Given Aspen’s strong 4.4 percent book value growth in the first quarter, Endurance’s new proposal represents an even lower multiple.”

Aspen investors who elect to take stock would get 0.9197 Endurance shares under the latest proposal, equal to about $47.57, based on Endurance’s closing price on May 30.

Aspen slipped 1.4 percent to $45.33 at 4:15 p.m. in New York. Endurance dropped 1 percent to $51.20, compared with a closing price of $53.82 before announcing its initial offer in April.

“We believe that Endurance will continue to aggressively pursue Aspen,” Keefe Bruyette & Woods analysts led by Meyer Shields wrote in a note to clients today.

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