(Bloomberg) — Aspen Insurance Holdings Ltd. adopted a so-called poison pill to discourage a hostile takeover after rebuffing a $3.2 billion buyout offer from Endurance Specialty Holdings Ltd. Aspen declined the most since February in New York trading.
The one-year plan will allow shareholders to buy stock at discounted prices if a person or group acquires 10% or more of the company, according to a statement today from Bermuda-based Aspen. The threshold is 15% for passive, institutional investors. The move is meant to make a hostile takeover too costly.
Endurance made its cash-and-stock offer public April 14, saying crop insurance would complement Aspen's offerings in the Lloyd's of London market, lead to better underwriting and save costs. Aspen called the offer "ill-conceived."
"The rights plan is designed to deter abusive tactics from being used in a proposed takeover," Aspen said in today's statement. It will also "provide that any transaction would appropriately reward our shareholders and be beneficial to our company."
Aspen slipped 1.9% to $44.52 at 9:58 a.m., compared with Endurance's $47.50-a-share offer. Aspen had rallied 11% to $43.77 the day the offer became public. Bermuda-based Endurance advanced 0.3% to $51.50 today.
Goldman Sachs Group Inc. is Aspen's financial adviser. The company is getting legal help from Wachtell, Lipton, Rosen & Katz and Willkie Farr & Gallagher LLP.
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