(Bloomberg) -- Endurance Specialty Holdings Ltd., theBermuda-based provider of property and casualty insurance,announced a $3.2 billion offer to buy Aspen Insurance Holdings Ltd.after the target company turned down its proposal.

Endurance offered to pay $47.50 per share, 21 percent more thanthe April 11 closing price of $39.37, the company said today in astatement.

“Despite our repeated attempts since late January to engage inconfidential and friendly discussions, Aspen’s board and managementhave rebuffed our proposal,” Endurance said. The refusal to holddiscussions denies Aspen’s shareholders “the ability to understandand attain the clear financial, operational and strategic benefitsof this transaction,” Endurance said.

Mid-sized insurers and reinsurers have been combining or joiningwith larger companies to diversify risk and gain scale to take onbigger accounts from primary carriers. Endurance said its offeringsin crop insurance would complement Bermuda-based Aspen’s products,including its operations in the Lloyd’s of London market.

Endurance said its return on equity and earnings per share wouldgain in 2015 under a takeover through more than $100 million inannual “synergies,” including cost cuts, underwriting improvementsand better chances for capital management.

Aspen said its board of directors unanimously rejected the offerafter consulting with advisers including Goldman Sachs Group Inc.;Wachtell, Lipton, Rosen & Katz; and Willkie Farr &Gallagher LLP.

‘Ill-conceived’

“Endurance’s ill-conceived proposal undervalues our company,represents a strategic mismatch, carries significant executionrisk, and would result in substantial dis-synergies,” AspenChairman Glyn Jones said in a separate statement.

Aspen jumped 11 percent to $43.77 at 4:15 p.m. in New York aftertrading as high as $46.86. The company had advanced about 1.8percent in the 12 months through April 11. Endurance dropped 2.8percent to $52.32, and is up about 8 percent over the pastyear.

Aspen investors will have the option to receive cash, Enduranceshares or a combination, according to the statement. Endurance saidit plans to pay 60 percent with its shares, and that investors ledby CVC Capital Partners Ltd.-advised funds are prepared to buy$1.05 billion of newly issued common shares to help fund the cashportion of the deal. CVC has provided an equity commitment letter,Endurance said.

“The proposal involves a number of substantial execution risks,including financing uncertainty,” Aspen said.

‘Enhanced ability’

Endurance had an initial public offering in 2003 and countedhedge-fund manager Richard Perry among founding investors. FidelityInvestments, David Booth’s Dimensional Fund Advisors and VanguardGroup Inc. were among Endurance’s top holders as of Dec. 31,according to data compiled by Bloomberg.

Aspen counts BlackRock Inc., Fidelity, Vanguard and Dimensionalamong top shareholders.

Endurance Chief Executive Officer John Charman is seeking toexpand the business after joining last year. Charman is the formerCEO of Axis Capital Holdings Ltd. and was ousted as chairman of thecompany in 2012 following a dispute over his role. He said he plansto buy $25 million of Endurance shares in connection with atakeover.

“The combined company will have a strong balance sheet andcapital position, with an enhanced ability to pursue growthopportunities and to withstand volatility,” he said in today’sstatement.

Endurance’s bankers on the offer are Morgan Stanley andJefferies Group LLC. Skadden, Arps, Slate, Meagher & Flom LLPand ASW Law Ltd. are providing legal advice.

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.