Endurance looks to acquire Aspen
Endurance has made public efforts to enter into talks with Aspen to acquire the company, a move that would establish the combined entity as a global leader in specialty insurance and reinsurance.
Endurance has announced that it has made a $3.2 billion offer for Aspen, with no response from Aspen to date.
Endurance has posted a full investor presentation regarding the benefits of the potential acquisition here. Endurance has said that it will keep the site update regarding developments pertaining to the potential transaction.
Endurance says that a $47.50 cash and stock proposal that it describes as “highly attractive” has been extended to Aspen’s board and management, but that to date Aspen has rebuffed Endurance’s proposal.
Endurance believes the combined entity would deliver “increased scale, market presence, diversification and profit potential” with over $5 billion on combined annual gross premiums written and $5 billion of pro forma common stakeholders equity.
Making the case for the transaction, Endurance says that the deal would deliver a 21 percent premium to Aspen’s share price as of April 11th, 2014, a 15 percent premium to Aspen’s all-time share price and more than 13 times the consensus earnings estimate for Aspen.
Commenting on the proposal, John Charman, Endurance's chairman and CEO, says: "This transaction is, quite simply, a unique opportunity to deliver value to shareholders of both Aspen and Endurance, while creating a new global leader in the industry.”
“The proposal offers up-front value for Aspen's shareholders, who will receive a substantial premium for their shares, as well as the opportunity to participate - along with Endurance's shareholders - in future value created by a stronger and more profitable company.”
"The specialised businesses of Endurance and Aspen, such as Endurance's market-leading agriculture insurance business and Aspen's Lloyd's operations, are highly complementary, and together we will create a company with increased scale, an attractive diversified platform across products and geographies, and greater market presence and relevance.”
“The combined company will have a strong balance sheet and capital position, with an enhanced ability to pursue growth opportunities and to withstand volatility. Further, we believe the combined company will enjoy increased profitability driven by a strong management team comprised of industry-leading talent and world-class underwriting expertise from both companies, as well as meaningful transaction synergies," says Charman.
"Despite our repeated attempts since late January to engage in confidential and friendly discussions, Aspen's Board and management have rebuffed our proposal and refused to engage with us, thereby denying Aspen's shareholders the ability to understand and attain the clear financial, operational and strategic benefits of this transaction.”
“We are fully committed to this transaction and are confident that Aspen's shareholders will recognize the value of our proposal and actively encourage their Board to begin constructive discussions with Endurance without delay, with the goal of reaching a negotiated transaction.”
Charman concludes, "Endurance shareholders will also significantly benefit from bringing these two leading companies together. Reflecting my own deep conviction about the future of Endurance and the benefits of the combination, I will purchase $25 million of Endurance common shares in connection with this transaction in addition to the $30 million of personal capital I have already invested in Endurance."
Endurance has indicated that it intends to keep the headquarters of the potential combined entity in Bermuda, with a significant presence in London, New York and other key markets.