Bloomberg News

Transatlantic Seeks Better Offer From Validus to Beat Allied

July 19, 2011

(Updates with comments from Transatlantic, Allied World starting in fourth paragraph.)

July 19 (Bloomberg) -- Transatlantic Holdings Inc., the reinsurer that agreed to merge with Allied World Assurance Company Holdings AG, said it will ask Validus Holdings Ltd. to improve its counteroffer.

Validus said last week that it would offer Transatlantic stock owners 1.5564 Validus common shares and $8 in cash for each share they hold. That valued the offer at about $3.5 billion, based on New York-based Transatlantic’s 62.4 million shares outstanding as of March 31.

Transatlantic agreed last month to merge with Allied in a stock transaction valued at $51.10 a share, or about $3.2 billion. Transatlantic’s biggest shareholder, Davis Selected Advisers LP, said on June 14 it may oppose the deal and approach other companies about alternatives.

“The Validus proposal is reasonably likely to lead to a superior proposal,” Transatlantic said today in a statement. The Validus offer “does not constitute a ‘superior proposal’ under the merger agreement that Transatlantic entered into with Allied World.”

Jonathan Doorley, a spokesman for Bermuda-based Validus, didn’t immediately respond to a message seeking comment.

“We agree with today’s decision by Transatlantic’s board that the unsolicited proposal set forth by Validus does not constitute a superior proposal,” Scott Carmilani, chairman and chief executive officer of Zug, Switzerland-based Allied World, said in a separate statement today.

--Editors: Dan Reichl, Dan Kraut

To contact the reporters on this story: Noah Buhayar in Los Angeles at nbuhayar@bloomberg.net; Brooke Sutherland in New York at bsutherland5@bloomberg.net.

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net


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