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Jan. 26, 2015, 12:25 PM
- Lack of scale has never been the problem at Axis Capital (AXS +5.4%), say Citigroup's Todd Bault and James Kaklick. The current issue is low demand, they say, and a merger with PartnerRe (PRE +1%) won't solve that.
- Noting the merger is being done at "no premium" (presumably to book value), the two say this deal and others in the industry are acts of necessity, rather than strategic opportunities. "The pressure to cut even more costs will be enormous given the lack of significant deal premiums."
- The team reiterates its Sell rating and $46 price target on Axis.
- More on the terms: PartnerRe owners will receive 2.18 shares in the combined company for each share they own, and Axis shares will convert on a one-to-one basis.
- A check of others in the industry: ACE Limited (ACE +0.1%), XL Group (XL +0.4%), Everest Re (RE +0.7%), RenaissanceRe (RNR +0.9%), Aspen Insurance (AHL +0.9%), Arch Capital (ACGL +0.2%), Reinsurance Group of America (RGA -0.6%), Montpelier Re (MRH +0.3%), Unum Group (UNM +0.1%).
- Previously: Axis Capital to merge with PartnerRe (Jan. 26)
Jun. 9, 2014, 7:39 AM
- It's courting of Aspen Insurance (AHL) repeatedly rejected, Endurance Specialty Holdings (ENH) tenders for all Aspen shares, offering $49.50 each in cash or 0.9197 Endurance shares, or a combination ($19.80 cash and 0.5518 shares).
- The exchange offer expires on August 29.
- ENH CEO Jon Charman: "We again call on Aspen's board and management to act in the best interests of Aspen's shareholders by engaging with us in constructive discussions regarding our increased proposal and to cease with their rhetoric and entrenchment."
- Previously: Endurance boosts Aspen offer to $49.50 per share; Aspen rejects
Jun. 2, 2014, 7:17 AM
- The new offer is $2 per share higher than the one rejected by Aspen Insurance (AHL) in April, and values the company at $3.2B. It also represents 1.16x Aspen's March 31 book value.
- The boosted offer was made privately to Aspen's board in early May and the board has rejected it.
- Endurance (ENH) CEO John Charman says discussions with Aspen shareholders shows broad support for the deal, but Aspen's board and management "have refused to engage with us in any manner whatsoever ... We will not be deterred by an entrenched board and management that refuse to engage productively on the merits of our compelling proposal."
Apr. 16, 2014, 2:57 PM
- "Looking over the landscape, we do not see too many competitors that would be willing to pay a similar premium to book value," says Janney's Ryan Byrnes, commenting on Endurance Specialty Holdings' (ENH -0.3%) hostile offer of 1.16x book value for Aspen Insurance Holdings (AHL +2.9%).
- "The chance of another acquirer coming into the picture is uncertain," says Sterne Agee. "While we have seen competing offers in past insurance transactions over the last several years, the deal multiples in those instances were close to/below book value.”
- Barclays isn't so sure, saying other suitors looking to increase their scale could emerge. Possible candidates: Allied World Insurance (AWH +0.7%) and Validus Holdings (VR +0.2%) - both were involved in 2011/2012's bidding war for Transatlantic, in which Alleghany ended up buying the company in a $3.4B deal.
Apr. 14, 2014, 10:31 AM
- Earlier, Endurance Specialty Holdings (ENH -3.2%) went public with a hostile $47.50 (cash and stock) per share bid for Aspen Insurance Holdings (AHL +15.3%) after weeks of fruitlessly courting Aspen management.
- Aspen Chairman Glyn Jones: "Endurance's ill-conceived proposal undervalues our company, represents a strategic mismatch, carries significant execution risk, and would result in substantial dis-synergies. Furthermore, most of the consideration to Aspen shareholders would be in a stock that would reflect these problems."
- Both stocks are currently under trading halt.
Apr. 14, 2014, 9:04 AM
- Aspen Insurance Holdings (AHL) is up 22.3% to $48.15 after a $47.50 cash and stock offer from Endurance Specialty Holdings (ENH) that values Aspen at 1.16x December 31 book value.
- Aspen owners can elect to receive $47.50 in cash for their stock, or 0.8826 Endurance shares for each Aspen share, or a combination of stock and cash.
- Endurance CEO John 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."
- ENH +2.2% to $55
Aspen Insurance Holdings Ltd offers property & casualty insurance, marine, aviation & energy insurance, & financial & professional lines insurance, property catastrophe reinsurance, other property reinsurance casualty reinsurance & specialty reinsurance.
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