AHL - Aspen Insurance Holdings Limited

[Cigarbutt]

This has been marginally discussed on this Board and is relevant to the (re)insurance industry.

https://www.privateequitywire.co.uk/2018/08/28/267781/aspen-insurance-holdings-be-acquired-apollo-global-management-all-cash-deal

"The Apollo Funds will acquire all of the outstanding shares of Aspen for USD42.75 per share in cash, representing an equity value of approximately USD2.6 billion."

 

Interesting because I find that the price paid to be low, especially given AHL's investment leverage and I wonder if AHL would have been a good fit with Fairfax. FFH may be more in a digestion phase and perhaps prefers to stay away from sometimes more than temporary underwriting operational hiccups.

 

Interesting also because, in 2014, AHL had "fought" a hostile bid from Endurance valued at USD3.2 billion responding that the insurer is “intensely focused on the continued successful execution of our strategic plan, building value for our shareholders and serving our customers.” The Endurance deal was cash and stock but what happened to Endurance stock with the subsequent acquisition by Sompo added another dimension to the concept of value building.

 

[walkie518]

This has been marginally discussed on this Board and is relevant to the (re)insurance industry.

https://www.privateequitywire.co.uk/2018/08/28/267781/aspen-insurance-holdings-be-acquired-apollo-global-management-all-cash-deal

"The Apollo Funds will acquire all of the outstanding shares of Aspen for USD42.75 per share in cash, representing an equity value of approximately USD2.6 billion."

 

Interesting because I find that the price paid to be low, especially given AHL's investment leverage and I wonder if AHL would have been a good fit with Fairfax. FFH may be more in a digestion phase and perhaps prefers to stay away from sometimes more than temporary underwriting operational hiccups.

 

Interesting also because, in 2014, AHL had "fought" a hostile bid from Endurance valued at USD3.2 billion responding that the insurer is “intensely focused on the continued successful execution of our strategic plan, building value for our shareholders and serving our customers.” The Endurance deal was cash and stock but what happened to Endurance stock with the subsequent acquisition by Sompo added another dimension to the concept of value building.

 

AHL has been on a the radar for a long time ... the last time I looked, I thought the investment was compelling on a quantitative basis, but the underlying value of the assets might never be realized without AHL achieving sufficient scale or getting bought, neither of which is a catalyst/thesis.

 

I believe AHL has been on the block here and there and walked away from offers.  Maybe now, they are re-thinking?

 

There are some smart guys with ownership stakes, but there are no real (+5% of portfolio) concentrated bets according to my knowledge. 

 

My guess here is that Apollo buys cheap, invests a lot more money, then brings the firm public or aims to sell to a larger insurance firm.  Maybe management stays on board, de-risks personally, but gets a big chunk of upside?

[Spekulatius]

I owned this and sold out a bit above $40, because the company is just a mess and other seemingly better managed insurers were trading at small premiums (RE, AXS), so I swapped into those instead.