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22 July 2014News

Aspen advises shareholders on ‘wasteful’ Endurance offer

Aspen’s board of directors has issued another letter to its shareholders in opposition to Endurance's solicitation of authorizations, urging them to reject both of Endurance's proposals.

In the letter, Aspen again implores its shareholders to promptly sign, date and return Aspen's BLUE revocation card and disregard Endurance's white authorization card.

Aspen describes Endurance’s offer for the company as ‘inadequate’, taking into account Aspen’s strong operating results and increasing book value. It goes on to say, “Endurance is engaging in wasteful and coercive legal tactics as a desperate attempt to create a false sense of urgency among Aspen shareholders and force through its inadequate proposal.”

Endurance made an unsolicited £3.2 billion bid for Aspen earlier this year, which was rejected by the insurer’s board. Since then, the two companies have engaged in a very public war of words as they battle to win the confidence of Aspen’s shareholders.

The letter, signed by both Aspen chairman Glyn Jones and its chief executive Chris O’Kane, proceeds to ask its readers to ‘consider the facts’, and makes a number of points in an attempt to further convince shareholders that siding with Endurance would be detrimental for the company.

Firstly, it says it is delivering on a clear plan that is generating strong financial results, including approximately 9 percent growth in book value per share since the beginning of this year.

It says that Endurance's offer – inadequate from the start – has become increasingly deficient as a result of Aspen's strong operating results. Endurance's offer is now approximately 1.1 times Aspen's book value.

It also says that Endurance's stock – which makes up 60 percent of its offer – is a highly unattractive currency given, among other reasons, Endurance's low-quality earnings have been significantly dependent on reserve releases.

It concludes by reiterating the fact that all three of the leading, independent governance advisory firms – Institutional Shareholder Services Inc., Glass, Lewis & Co., LLC and Egan-Jones Proxy Services – recommend that Aspen shareholders reject both of Endurance's authorization proposals.