Aspen Insurance Holdings Ltd. said Monday that its board has rejected a proposal from fellow insurance company Endurance Specialty Holdings Ltd. to buy it for about $3.2 billion.
Aspen said its board rejected the proposed deal because it is "not in the best interest" of the company or shareholders, and that Endurance "has a mixed operating track record, new leadership, an unproven strategy and no experience with large acquisitions."
Earlier Monday, Endurance went public with its proposal to buy Aspen after being snubbed by the company for three months.
Endurance said that the rejection is a way for Aspen to deflect from the "highly attractive premium value" the deal would bring.
"That's a lot of value to leave on the table," said Endurance CEO John Charman, in a statement.
In a public letter early Monday, Endurance told Aspen's board that it is offering $47.50 for each share of the company, a nearly 21 percent increase from Aspen's closing price of $39.37 on Friday. For each Aspen share, shareholders can select cash, 0.8826 of an Endurance share or a combination.
"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," said Charman.
Charman said the deal could increase profits, save costs by more than $100 million a year and increase earnings per share for Endurance.
The combined company would have over $5 billion in annual gross premiums written, Endurance said.
In afternoon trading, Aspen shares rose $4.25, or 11 percent, to $43.62. Endurance shares fell $1.06 to $52.76.
Both insurance companies are based in Bermuda.