Aspen defends Apollo bid analysis after shareholder sues

Aspen has defended the analysis of the company’s value in relation to its sale to Apollo after a shareholder filed a lawsuit.

Apollo agreed in August to buy Aspen for $2.6bn cash. The $42.75-per-share deal values the (re)insurer at just over 1.1x trailing book value.

In a class action filed with a New York district court on behalf of “himself and the other public stockholders of Aspen”, shareholder Michael Kent alleges that the proxy statement, filed by Aspen with the Securities and Exchange Commission in relation to the merger on 6 November, omitted or misstated key information.

The defendants are Aspen and members of its board, including chairman Glyn Jones and CEO Chris O’Kane.

In the suit, Michael Kent v. Aspen Insurance Holdings Ltd, the shareholder takes issue with information related to analyses performed by Aspen advisers Goldman Sachs and JP Morgan.

“The complaint alleges, among other things that the definitive proxy statement omits or misstates various facts concerning the financial analyses performed by the financial advisers to Aspen,” the Aspen filing noted.

Alleged omissions from the proxy statement are assumptions underlying the discount rate applied to the present value or future share price analysis included in the document, the suit claims.

Kent also complains that the document does not disclose the transactions used by Goldman Sachs in its analysis of the premiums paid in similar deals.

The complainant said the proxy statement therefore contains false or misleading information, and “omits material information, rendering it false and misleading”.

Aspen yesterday issued an 8K form, which included additional information on the analyses in question in the original proxy statement.

However, it added that the publication of these details was not a concession that they were material or legally required.