Aspen Insurance Holdings Ltd. (AHL) climbed to a new, all-time high after rejecting a $3.2 billion buyout offer by rival Endurance Specialty Holdings Ltd (ENH).
In a statement, AHL said its board of directors unanimously voted against accepting the ENH offer, calling it an “ill-conceived proposal” that undervalues the company and creating a strategic mismatch.
AHL also blasted the April 3 proposal, which values the insurer at $47.50 a share – a 20.7% premium over its closing price Friday – through a combination of $1.28 billion in cash and the rest in ENH stock, saying it likely carries significant execution risk for the combined companies, including financing uncertainties and resulting in “substantial dis-synergies.”
In presentation included in a regulatory filing today, ENH said a potential deal would create a firm with over $5 billion in gross annual premiums and $7.6 billion in total capital. It would fund the deal using existing cash on hand as well as $1.05 billion from a new equity investment, saying it has a written commitment for a deal from investors affiliated with CVC Capital Partners.
There also is a long-standing animosity between the firms, with AHL previously filing suit against ENH, accusing it of “orchestrated poaching” of AHL employees.
AHL shares were up 10.7% at $43.57 each in late afternoon trading, earlier climbing to a record high of $46.86 a share. ENH was down 1.9% at $52.79 a share, earlier sliding to session low of $51.86 each.