FILED BY ENDURANCE SPECIALTY HOLDINGS LTD.
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
AND DEEMED FILED PURSUANT TO RULE 14a-12
UNDER THE SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: ASPEN INSURANCE HOLDINGS LIMITED
SEC REGISTRATION STATEMENT FILE NO. 333-196596
Endurance Sends Letter Urging Fellow Aspen Shareholders to Make Their Voices Heard: Tell Aspen Its Time to
Put Entrenched Interests Aside and Focus on the Clear Benefits of Endurances Offer
Aspens Performance Under Current Board and
Management Has Significantly Lagged Endurance
Aspens Board and Management Have Not Shown That They Can or Will Deliver Value to Aspen
Shareholders
Aspen Shareholders Should Vote FOR Endurances Two Proposals by Signing, Dating and Returning the WHITE Card by
July 25th
PEMBROKE, Bermuda, July 10, 2014 Endurance Specialty Holdings Ltd. (Endurance) (NYSE: ENH) is urging
fellow shareholders of Aspen Insurance Holdings Limited (Aspen) (NYSE: AHL) to make their voices heard and tell Aspens board and management its time to put entrenched interests aside and focus on the clear benefits of
Endurances offer.
In a letter being sent to Aspen shareholders, Endurance requests that Aspen shareholders vote
FOR
its proposals to
requisition a special general meeting of shareholders in connection with Endurances proposal to increase the size of Aspens board of directors from 12 to 19 directors and to authorize support for the proposal of a Scheme of Arrangement
by Endurance. By voting
FOR
Endurances two proposals on the
WHITE
card, Aspen shareholders would be taking concrete action towards realizing the significant upfront premium and opportunity for long-term value of Endurances
offer.
In its letter, Endurance reminds Aspen shareholders that it has set July 25, 2014 as the target date for voting on its two proposals.
The letter being mailed to Aspen common shareholders reads as follows:
Dear Fellow Aspen Shareholder:
Nearly half a year has gone by since
Endurance first proposed to acquire all of the common shares of Aspen for a highly attractive premium
and a compelling opportunity for future value creation
. By now one would have expected Aspens board and management to have acted upon Endurances offer, thereby realizing significant value for Aspen shareholders. Instead, Aspens
board and management have consistently taken actions to entrench their position and try to prevent the true owners of Aspen from realizing the significant benefits of Endurances offer
none of these actions is in the best interests of
Aspens shareholders
.
Dont be fooled by Aspens
dubious
assurances about its standalone
plan.
Under the stewardship of its current board and management, Aspens performance has lagged that of Endurance across key metrics
, including underwriting profitability (i.e., combined ratio), diluted book value per share growth
and share price performance. Despite the efforts of Aspens board and management to distort the truth and confuse shareholders,
there is no denying the facts:
What has been the response of Aspens board and management to their chronic underperformance? Actions
that we believe are not in the best long-term interests of Aspens shareholders.
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Instead of managing Aspens catastrophe risk exposures carefully in a declining rate environment (as has been done by Endurance and virtually all of Aspens other peers), Aspens board and management
increased Aspens net catastrophe reinsurance premiums in the first quarter of 2014 by 19% a striking surge in risk premium for Aspens shareholders in exchange for the dubious benefit of short term growth.
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Perhaps to justify the claims of U.S. insurance business profitability in the future, Aspens current management appears to be propping up its growth with third party insurance programs (an increase of 328% in 2012
and 27% in 2013), which deliver control of Aspens underwriting and claims authority to unaffiliated third parties. With its program business, Aspen is essentially renting short term premium growth, contracting with third party underwriters who
both retain the right to the business (and the associated intellectual capital) and do not necessarily have the best long-term interests of Aspen as their primary objective.
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Aspens board and management have imposed on Aspens shareholders additional loss reserving risk over the past three years, with a slow and steady erosion of Aspen managements selected gross loss reserve
estimate from a 90% confidence level at December 31, 2011 to an 86% confidence level at December 31, 2013.
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TRUE
PERFORMANCE IS WHAT MATTERS.
ASPENS CURRENT BOARD AND MANAGEMENT HAVE CONSISTENTLY FAILED TO DELIVER FOR YOU. ASPEN
SHAREHOLDERS DESERVE A FUTURE WHERE PERFORMANCE IS THE TOP PRIORITY.
WHAT ASPENS CURRENT BOARD AND MANAGEMENT HAVE FAILED TO
ACHIEVE FOR 10 YEARS, WE ARE PREPARED TO DELIVER TODAY.
Aspens campaign of rhetoric and misinformation regarding Endurance is a
smokescreen designed to deflect attention away from Aspens long track record of poor operating performance and dismal corporate governance under its current board and management, including a classified board, a poison pill and a substantially
larger share grant for the CEO following Endurances announcement of the proposed transaction.
Endurances proposed
transaction represents a unique opportunity for Aspens shareholders to realize a highly attractive premium value for their shares.
While Aspens board and management team are making vague promises of future value, their past
performance has shown that they are unlikely to deliver and their entrenched corporate governance position shows that they wont care.
MAKE YOUR VOICES HEARD AND TELL ASPENS BOARD AND MANAGEMENT
ITS TIME TO PUT ENTRENCHED INTERESTS ASIDE AND
FOCUS ON THE CLEAR BENEFITS OF ENDURANCES OFFER.
You should NOT allow your interests and this compelling transaction to be ignored.
Endurances offer of $49.50 per Aspen common
share with a combination of 40% cash and 60% Endurance common shares (based on Endurances unaffected closing share price on April 11, 2014) represents
a 19.5% premium to the highest unaffected share price Aspens board and
management have ever achieved
. As the
true owners of Aspen
, you deserve a say in the future direction of your company and the ability to receive the premium value for your shares that Endurance is offering.
We urge you to vote FOR
the two specific proposals that Endurance has made:
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To authorize the requisitioning of a special general meeting of Aspen shareholders to increase the size of Aspens board from 12 to 19 directors. If the proposal is approved at the special general meeting, a
majority of Aspens directors will stand for election at Aspens 2015 annual general meeting, thereby giving Aspen shareholders the ability to hold their board directly accountable for their failure to be responsive to the best interests
of the companys true owners.
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To authorize support of a court-ordered meeting of Aspen shareholders to consider and vote on a Scheme of Arrangement.
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These proposals empower Aspen shareholders by providing the abilitynot the
obligationto support Endurances highly attractive offer and strategic transaction.
Your support
FOR
these proposals by
signing, dating and returning the enclosed
WHITE
card will represent
concrete action
towards realizing the
significant upfront premium and opportunity for long-term value
of Endurances offer and will send an undeniably
clear message
to the Aspen board of directors that
NOW
is the time to put aside the rhetoric and engage in good faith negotiations with Endurance.
Your vote is extremely important, no matter how many or how few Aspen shares you own.
Please vote the
WHITE
card
TODAY
by signing, dating and returning the enclosed
WHITE
card in the postage-paid envelope provided.
We urge you
NOT
to sign the blue revocation card that you may have received from Aspen. Instead, please sign, date and return the enclosed
WHITE
card
TODAY
. Even if you have already signed Aspens blue revocation card, you may revoke
your previous revocation by signing, dating and returning the enclosed
WHITE
card.
If you have any questions or need assistance
voting your Aspen shares, please contact the firm assisting us with this solicitation, Georgeson Inc., at (877) 278-9672 (toll-free) or via email at enduranceaspen@georgeson.com.
Thank you in advance for your support.
John R. Charman
Chairman and Chief Executive Officer
Endurance Specialty Holdings Ltd.
Endurance has set a target date of July 25, 2014 for Aspen shareholders to vote on Endurances
two proposals and urges Aspen shareholders to vote the WHITE card TODAY.
Please visit us at www.endurance-aspen.com for up to date information and copies of past letters and presentations to Aspen
shareholders.
If you would like to receive information from us directly, please email us at
enduranceaspen@georgeson.com or call us at (877) 278-9672 (toll-free).
About Endurance Specialty Holdings
Endurance Specialty Holdings Ltd. is a global specialty provider of property and casualty insurance and reinsurance. Through its operating subsidiaries,
Endurance writes agriculture, professional lines, property, and casualty and other specialty lines of insurance and catastrophe, property, casualty, professional lines and specialty lines of reinsurance. We maintain excellent financial strength as
evidenced by the ratings of A (Excellent) from A.M. Best (XV size category) and A (Strong) from Standard and Poors on our principal operating subsidiaries. Endurances headquarters are located at Waterloo House, 100 Pitts Bay Road,
Pembroke HM 08, Bermuda and its mailing address is Endurance Specialty Holdings Ltd., Suite No. 784, No. 48 Par-la-Ville Road, Hamilton HM 11, Bermuda. For more information about Endurance, please visit www.endurance.bm.
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Cautionary Note Regarding Forward-Looking Statements
Some of the statements in this press release may include, and Endurance may make related oral, forward-looking statements which reflect our current views with
respect to future events and financial performance. Such statements may include forward-looking statements both with respect to us in general and the insurance and reinsurance sectors specifically, both as to underwriting and investment matters.
These statements may also include assumptions about our proposed acquisition of Aspen (including its benefits, results, effects and timing). Statements which include the words should, would, expect,
intend, plan, believe, project, target, anticipate, seek, will, deliver and similar statements of a future or forward-looking nature identify
forward-looking statements in this press release for purposes of the U.S. federal securities laws or otherwise. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the Private
Securities Litigation Reform Act of 1995, except to the extent made in connection with Endurances exchange offer.
All forward-looking statements
address matters that involve risks and uncertainties. Accordingly, there are or may be important factors that could cause actual results to differ materially from those indicated in the forward-looking statements. These factors include,
but are not limited to, the effects of competitors pricing policies, greater frequency or severity of claims and loss activity, changes in market conditions in the agriculture insurance industry, termination of or changes in the terms of the
U.S. multiple peril crop insurance program, a decreased demand for property and casualty insurance or reinsurance, changes in the availability, cost or quality of reinsurance or retrocessional coverage, our inability to renew business previously
underwritten or acquired, our inability to maintain our applicable financial strength ratings, our inability to effectively integrate acquired operations, uncertainties in our reserving process, changes to our tax status, changes in insurance
regulations, reduced acceptance of our existing or new products and services, a loss of business from and credit risk related to our broker counterparties, assessments for high risk or otherwise uninsured individuals, possible terrorism or the
outbreak of war, a loss of key personnel, political conditions, changes in accounting policies, our investment performance, the valuation of our invested assets, a breach of our investment guidelines, the unavailability of capital in the future,
developments in the worlds financial and capital markets and our access to such markets, government intervention in the insurance and reinsurance industry, illiquidity in the credit markets, changes in general economic conditions and other
factors described in our Annual Report on Form 10-K for the year ended December 31, 2013 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014. Additional risks and uncertainties related to the proposed
transaction include, among others, uncertainty as to whether Endurance will be able to enter into or consummate the transaction on the terms set forth in the proposal, the risk that our or Aspens shareholders do not approve the transaction,
potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction, uncertainties as to the timing of the transaction, uncertainty as to whether Aspen shareholders tender into the
exchange offer, uncertainty as to the actual premium of the Endurance share component of the proposal that will be realized by Aspen shareholders in connection with the transaction, competitive responses to the transaction, the risk that regulatory
or other approvals required for the transaction are not obtained or are obtained subject to conditions that are not anticipated, the risk that the conditions to the closing of the transaction are not satisfied, costs and difficulties related to the
integration of Aspens businesses and operations with Endurances businesses and operations, the inability to obtain, or delays in obtaining, cost savings and synergies from the transaction, unexpected costs, charges or expenses resulting
from the transaction, litigation relating to the transaction, the inability to retain key personnel, and any changes in general economic and/or industry specific conditions.
Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation publicly to update or revise any forward-looking
statement, whether as a result of new information, future developments or otherwise.
The foregoing review of important factors should not be construed as
exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere, including the risk factors included in our most recent reports on Form 10-K and Form 10-Q and the risk factors included in
Aspens most recent reports on Form 10-K and Form 10-Q and other documents of Endurance and Aspen on file with the U.S. Securities and Exchange Commission (the SEC). Any forward-looking statements made in this press release are
qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by Endurance will be realized or, even if substantially realized, that they will have the expected consequences to, or
effects on, us or our business or operations.
Additional Information about the Proposed Transaction and Where to Find It
This press release relates to the offer commenced by Endurance to exchange each issued and outstanding common share of Aspen (together with associated
preferred share purchase rights) for $49.50 in cash, 0.9197 Endurance common shares, or a combination of cash and Endurance common shares, subject to a customary proration mechanism. This press release is for informational purposes only and
does not constitute an offer to exchange, or a solicitation of an offer to exchange, Aspen common shares, nor is it a substitute for the Tender Offer Statement on Schedule TO or the Prospectus/Offer to Exchange included in the Registration Statement
on Form S-4 (including the Letter of Transmittal and Election and related documents and as amended from time to time, the Exchange Offer Documents) that Endurance has filed with the SEC. The Endurance exchange offer will be made only
through the Exchange Offer Documents.
This press release is not a substitute for any other relevant documents that Endurance may file with the SEC or any
other documents that Endurance may send to its or Aspens shareholders in connection with the proposed transaction. Endurance has sent to Aspen shareholders a solicitation statement with respect to the solicitation of (i) written
requisitions that the board of directors of Aspen convene a special general meeting of Aspens shareholders to vote on an increase in the size of Aspens board of directors from 12 to 19 directors and (ii) Aspen shareholder support
for the proposal of a scheme of arrangement by Endurance which will entail the holding of a court-ordered meeting of Aspen shareholders at which Aspens shareholders would vote to approve
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a scheme of arrangement under Bermuda law pursuant to which Endurance would acquire all of Aspens outstanding common shares on financial terms no less favorable than those contained in its
acquisition proposal announced on June 2, 2014 (the Solicitation Statement).
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
EXCHANGE OFFER DOCUMENTS AND THE SOLICITATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT ENDURANCE HAS FILED OR MAY FILE WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION. All such documents, when filed, are available free of charge at the SECs website (www.sec.gov) or by directing a request to Endurance at the Investor Relations contact below.
Participants in the Solicitation
Endurance and its
directors and certain of its executive officers and employees may be deemed to be participants in any solicitation of shareholders in connection with the proposed transaction. Information about Endurances directors, executive officers and
employees who may be deemed to be participants in the solicitation, including a description of their direct and indirect interests, by security holdings or otherwise, is set forth in the Solicitation Statement and Endurances proxy statement,
dated April 9, 2014, for its 2014 annual general meeting of shareholders.
Regulation G Disclaimer
In this press release, Endurance has included certain non-GAAP measures, including return on equity, combined ratio and diluted book value per
share. Endurance management believes that these non-GAAP measures, which may be defined differently by other companies, better explain the proposed transaction in a manner that allows for a more complete understanding. However, these
measures should not be viewed as a substitute for those determined in accordance with GAAP. For a complete description of non-GAAP measures and reconciliations, please review the Investor Financial Supplement on Endurances website at
www.endurance.bm.
Additional Information
All
references in this press release to $ refer to United States dollars.
The contents of any website referenced in this press release are not
incorporated by reference herein.
Contacts:
Endurance Specialty Holdings Ltd.
Investor Relations
Phone: +1 441 278 0988
Email: investorrelations@endurance.bm
Georgeson
Donna Ackerly and David Drake
Phone: 212 440 9837/9861
Email: dackerly@georgeson.com and
ddrake@georgeson.com
Media Relations
Ruth Pachman and
Thomas Davies
Kekst and Company
Phone: 212 521 4891/4873
Email: Ruth-Pachman@kekst.com and Tom-Davies@kekst.com
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