Aspen Insurance Holdings Limited (“Aspen” or “Company”)
(NYSE:AHL) announced today that it has issued a letter to
shareholders in opposition to Endurance Specialty Holdings Ltd.
(“Endurance”) (NYSE:ENH) solicitation of authorizations. Aspen’s
Board of Directors urges shareholders to reject both of Endurance’s
proposals by promptly signing, dating and returning Aspen’s BLUE
revocation card and disregarding Endurance’s white authorization
card.
Information on Aspen’s response to Endurance’s unsolicited
offer, including links to press releases, presentations, and other
important documents and SEC filings are available on the Internet
at http://aspen.shareholderresource.com, or on Aspen’s website at
http://www.aspen.co.
Below is the full text of the letter to Aspen shareholders:
July 21, 2014
Dear Aspen Shareholder:
ASPEN URGES YOU TO REJECT ENDURANCE’S
AUTHORIZATION PROPOSALS
Endurance Specialty Holdings Ltd. continues to pursue its
inadequate offer for your company, Aspen Insurance Holdings – an
offer that has become even weaker as a result of Aspen’s strong
operating results and increasing book value. 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.
Consider the facts:
- Aspen is delivering on a clear plan
that is generating strong financial results, including
approximately 9% growth in book value per share since the beginning
of this year.i
- 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.ii
- Endurance’s stock – which makes up 60%
of its offer – is a highly unattractive currency given, among other
reasons, Endurance’s low-quality earnings that have been
significantly dependent on reserve releases.
- 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.
DO NOT TO SUBMIT ANY WHITE ENDURANCE
AUTHORIZATION CARDS –
PLEASE SIGN, DATE AND RETURN THE BLUE
REVOCATION CARD TODAY
If you have questions or need assistance revoking your
authorizations for your shares, please contact our agent Innisfree
M&A Incorporated: Shareholders call toll-free: (877) 717-3930;
Banks and Brokers call collect: (212) 750-5833. We appreciate your
input and support.
Sincerely yours,
/s/
/s/ Glyn Jones Chris O’Kane
Chairman of the Board of Directors
Chief Executive Officer
Even if you have already signed Endurance’s
white authorization card,you may revoke your authorizations
by signing, dating and returningthe enclosed BLUE revocation card.
If you have questions or need
assistancerevoking your authorizations for your shares,
please contact our agent:
INNISFREE M&A INCORPORATED
Shareholders call toll-free: (877)
717-3930Banks and Brokers call collect: (212)
750-5833
Goldman, Sachs & Co. is acting as financial advisor and
Wachtell, Lipton, Rosen & Katz and Willkie Farr & Gallagher
LLP are acting as legal advisors to Aspen.
About Aspen Insurance Holdings Limited
Aspen provides reinsurance and insurance coverage to clients in
various domestic and global markets through wholly-owned
subsidiaries and offices in Bermuda, France, Germany, Ireland,
Singapore, Switzerland, the United Kingdom and the United States.
For the year ended December 31, 2013, Aspen reported $10.2 billion
in total assets, $4.7 billion in gross reserves, $3.3 billion in
shareholders’ equity and $2.6 billion in gross written premiums.
Its operating subsidiaries have been assigned a rating of “A”
(“Strong”) by Standard & Poor’s, an “A” (“Excellent”) by A.M.
Best and an “A2” (“Good”) by Moody’s.
Cautionary Statements Concerning Forward-Looking
Statements
This press release contains written, and Aspen may make related
oral, "forward-looking statements" within the meaning of the U.S.
federal securities laws. These statements are made pursuant to
common law doctrine and, to the extent applicable, the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include all statements that do not
relate solely to historical or current facts, and can be identified
by the use of words such as "expect," "intend," "plan," "believe,"
"do not believe," "aim," "project," "anticipate," "seek," "will,"
"likely," “assume,” "estimate," "may," "continue," "guidance,"
“objective,” “outlook,” “trends,” “future,” “could,” “would,”
“should,” “target,” and similar expressions of a future or
forward-looking nature.
The preannounced preliminary results referred to in this press
release are forward-looking statements of particular financial
measures and no inferences should be made in relation to other
financial measures, outlook or guidance that Aspen may disclose
when the final second quarter and six month results are announced
on July 23, 2014. All forward-looking statements rely on a number
of assumptions, estimates and data concerning future results and
events and are subject to a number of uncertainties and other
factors, many of which are outside Aspen’s control that could cause
actual results to differ materially from such statements.
Forward-looking statements do not reflect the potential impact
of any future collaboration, acquisition, merger, disposition,
joint venture or investments that Aspen may enter into or make, and
the risks, uncertainties and other factors relating to such
statements might also relate to the counterparty in any such
transaction if entered into or made by Aspen.
All forward-looking statements address matters that involve
risks and uncertainties. Accordingly, there are or will be
important factors that could cause actual results to differ
materially from those indicated in these statements. Aspen believes
these factors include, but are not limited to: our ability to
successfully implement steps to further optimize the business
portfolio, ensure capital efficiency and enhance investment
returns; the possibility of greater frequency or severity of claims
and loss activity, including as a result of natural or man-made
(including economic and political risks) catastrophic or material
loss events, than our underwriting, reserving, reinsurance
purchasing or investment practices have anticipated; the
assumptions and uncertainties underlying reserve levels that may be
impacted by future payments for settlements of claims and expenses
or by other factors causing adverse or favorable development; the
reliability of, and changes in assumptions to, natural and man-made
catastrophe pricing, accumulation and estimated loss models;
decreased demand for our insurance or reinsurance products and
cyclical changes in the highly competitive insurance and
reinsurance industry; increased competition from existing insurers
and reinsurers and from alternative capital providers and
insurance-linked funds and collateralized special purpose insurers
on the basis of pricing, capacity, coverage terms, new capital,
binding authorities to brokers or other factors and the related
demand and supply dynamics as contracts come up for renewal;
changes in general economic conditions, including inflation,
deflation, foreign currency exchange rates, interest rates and
other factors that could affect our financial results; the risk of
a material decline in the value or liquidity of all or parts of our
investment portfolio; evolving issues with respect to
interpretation of coverage after major loss events; our ability to
adequately model and price the effect of climate cycles and climate
change; any intervening legislative or governmental action and
changing judicial interpretation and judgments on insurers’
liability to various risks; the effectiveness of our risk
management loss limitation methods, including our reinsurance
purchasing; changes in the total industry losses, or our share of
total industry losses, resulting from past events and, with respect
to such events, our reliance on loss reports received from cedants
and loss adjustors, our reliance on industry loss estimates and
those generated by modeling techniques, changes in rulings on flood
damage or other exclusions as a result of prevailing lawsuits and
case law; the impact of one or more large losses from events other
than natural catastrophes or by an unexpected accumulation of
attritional losses; the impact of acts of terrorism, acts of war
and related legislation; any changes in our reinsurers’ credit
quality and the amount and timing of reinsurance recoverables;
changes in the availability, cost or quality of reinsurance or
retrocessional coverage; the continuing and uncertain impact of the
current depressed lower growth economic environment in many of the
countries in which we operate; the level of inflation in repair
costs due to limited availability of labor and materials after
catastrophes; a decline in our operating subsidiaries’ ratings with
S&P, A.M. Best or Moody’s; the failure of our reinsurers,
policyholders, brokers or other intermediaries to honor their
payment obligations; our ability to execute our business plan to
enter new markets, introduce new products and develop new
distribution channels, including their integration into our
existing operations; our reliance on the assessment and pricing of
individual risks by third parties; our dependence on a few brokers
for a large portion of our revenues; the persistence of heightened
financial risks, including excess sovereign debt, the banking
system and the Eurozone debt crisis; changes in our ability to
exercise capital management initiatives (including our share
repurchase program) or to arrange banking facilities as a result of
prevailing market changes or changes in our financial position;
changes in government regulations or tax laws in jurisdictions
where we conduct business; changes in accounting principles or
policies or in the application of such accounting principles or
policies; Aspen or Aspen Bermuda Limited becoming subject to income
taxes in the United States or the United Kingdom; loss of one or
more of our senior underwriters or key personnel; our reliance on
information and technology and third party service providers for
our operations and systems; and increased counterparty risk due to
the credit impairment of financial institutions. For a more
detailed description of these uncertainties and other factors,
please see the "Risk Factors" section in Aspen's Annual Report on
Form 10-K as filed with the U.S. Securities and Exchange Commission
on February 20, 2014 and in Aspen’s Quarterly Report on Form 10-Q
as filed with the U.S. Securities and Exchange Commission on May 1,
2014. Aspen undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise. Readers are cautioned not
to place undue reliance on these forward-looking statements, which
speak only as of the dates on which they are made.
In addition, any estimates relating to loss events involve the
exercise of considerable judgment and reflect a combination of
ground-up evaluations, information available to date from brokers
and cedants, market intelligence, initial tentative loss reports
and other sources. The actuarial range of reserves and management's
best estimate represents a distribution from our internal capital
model for reserving risk based on our then current state of
knowledge and explicit and implicit assumptions relating to the
incurred pattern of claims, the expected ultimate settlement
amount, inflation and dependencies between lines of business. Due
to the complexity of factors contributing to the losses and the
preliminary nature of the information used to prepare these
estimates, there can be no assurance that Aspen’s ultimate losses
will remain within the stated amounts.
Additional Information
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities or a solicitation
of any vote or approval. This communication is for informational
purposes only and is not a substitute for any relevant documents
that Aspen may file with the U.S. Securities and Exchange
Commission (“SEC”).
Endurance has commenced an exchange offer for the outstanding
shares of Aspen (together with associated preferred share purchase
rights). Aspen has filed with the SEC a solicitation/recommendation
statement to its shareholders on Schedule 14D-9. Endurance is also
soliciting authorizations from Aspen’s shareholders. Aspen has
filed a revocation statement to its shareholders on Schedule 14A
with the SEC in opposition to Endurance’s solicitation of
authorizations.
INVESTORS AND SECURITY HOLDERS OF ASPEN ARE URGED TO READ THIS
AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY
AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders will be able to obtain
free copies of these documents (when available) and other documents
filed with the SEC by Aspen through the web site maintained by the
SEC at http://www.sec.gov. These documents will also be available
at http://aspen.shareholderresource.com or on Aspen’s website at
http://www.aspen.co.
Certain Information Regarding Participants
Aspen and certain of its respective directors and executive
officers may be deemed to be participants under the rules of the
SEC. Security holders may obtain information regarding the names,
affiliations and interests of Aspen’s directors and executive
officers in Aspen’s Annual Report on Form 10-K for the year ended
December 31, 2013, which was filed with the SEC on February 20,
2014, and its proxy statement for the 2014 Annual Meeting, which
was filed with the SEC on March 12, 2014. These documents can be
obtained free of charge from the sources indicated above.
i Based on preliminary diluted book value per share of between
$44.60 and $44.80 as of 6/30/14 as announced by Aspen on July 10,
2014. Diluted Book Value per Ordinary Share is not a non-GAAP
financial measure. Aspen has included diluted book value per
ordinary share as it illustrates the effect on basic book value per
share of dilutive securities thereby providing a better benchmark
for comparison with other companies. Diluted book value per share
is calculated using the treasury stock method, which assumes that
the proceeds received from the exercise of options will be used to
purchase Aspen's ordinary shares at the average market price during
the period of calculation.
ii Based on preliminary diluted book value per share of between
$44.60 and $44.80 as of 6/30/14 as announced by Aspen on July 10,
2014, and total stock/cash offer value on 7/18/14.
For further
information:Please visit www.aspen.co or
contact:InvestorsKerry Calaiaro, +1 646-502 1076Senior Vice
President, Investor Relations,
AspenKerry.Calaiaro@aspen.coorKathleen de Guzman, +1 646-289
4912Vice President, Investor Relations,
Aspenkathleen.deguzman@aspen.coorInnisfree M&A
IncorporatedArthur Crozier/Jennifer Shotwell/Larry Miller, +1
212-750 5833orMediaSteve Colton, +44 20 7184 8337Head of
Communications, AspenSteve.Colton@aspen.coorNorth America – Sard
Verbinnen & CoPaul Scarpetta, Jamie Tully or Jared Levy, +1
212-687 8080orInternational – Citigate Dewe RogersonPatrick Donovan
or Caroline Merrell, +44 20 7638
9571patrick.donovan@citigatedr.co.ukcaroline.merrell@citigatedr.co.uk
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