Endurance Specialty Holdings' (ENH.N) increased offer to buy Aspen Insurance Holdings (AHL.N) was rejected for the second time but the insurer said it was willing to launch a proxy fight to get the deal done.
Endurance said on Monday it raised the offer by $2.00 to $49.50 per share, giving Aspen shareholders the option of taking cash or shares or a combination of both.
The offer values Aspen at $3.2 billion.
Endurance said it would call for a special general meeting of Aspen shareholders, where they would consider a proposal to increase the size of Aspen's board to 19 from 12 members. This would result in a majority of Aspen's directors standing for election next year.
Aspen shares rose as much as $46.85 on Monday. Up to Friday's close, they had risen nearly 17 percent since April 14 when Endurance first disclosed its unsolicited bid.
"In addition to grossly undervaluing Aspen, the proposal represents a strategic mismatch and, based on our conversations with major clients and brokers, would result in significantly greater dis-synergies than Endurance claims," Aspen Chairman Glyn Jones said in a statement.
Reuters reported last month that Endurance was considering increasing its offer to acquire Aspen Insurance to around $50 per share.
Endurance said Morgan Stanley had committed to provide a $1.0 billion bridge loan to fund the takeover.
The company had previously said it would fund the acquisition partly through proceeds of $1.05 billion from a placement of new shares to investors led by CVC Capital Partners Advisory and its affiliates.
Aspen's shares closed at $45.33 on the New York Stock Exchange on Monday.
(Reporting by Amrutha Gayathri and Anil D'Silva in Bangalore; Editing by Saumyadeb Chakrabarty)