After three months of trying, Bermuda reinsurance company Endurance Specialty Holdings Ltd. has given up trying to acquire archrival Aspen Insurance Holdings Ltd.

The final blow apparently happened July 25 when Aspen announced that most of its shareholders participating in a consent solicitation rejected two Endurance proposals that would have made its $3.2 billion bid more likely to succeed. Shareholders voted on Endurance’s proposal for a special meeting that would call for a vote to increase the size of Aspen’s board of directors. Endurance also wanted to petition the Supreme Court of Bermuda as part of a takeover bid known as an involuntary scheme of arrangement.

In a statement, Endurance Chairman and CEO John Charman said that Bermuda’s legal climate and Aspen’s tactics poisoned the M&A opportunity, despite support from some shareholders.

“We believe the current Bermuda corporate governance laws, Aspen’s focus on defensive self-preservation tactics rather than value creation, and the unwillingness of Aspen’s shareholders to take a stand make it impractical at this time for Aspen shareholders to realize the compelling value of our offer,” Charman said. That offer stood at $49.60 per Aspen common share at the close of trading on July 25.

Charman said that the strategic and financial benefits of Endurance’s M&A bid remain, but that the company’s management and board “recognize the importance of being responsible custodians of our own shareholders’ capital.”

The company will plow ahead with a focus on its business plan, Charman said.

Endurance’s exchange offer was set to expire on Aug. 29, 2014. But Endurance is having the exchange agent return all Aspen common shares to the tendering shareholders, the company said.

Source: Endurance Specialty Holdings Ltd.

Topics Mergers & Acquisitions