Bloomberg News

Transatlantic Enters Discussions With Additional Suitor

October 11, 2011

(Updates with share gain in fifth paragraph.)

Oct. 11 (Bloomberg) -- Transatlantic Holdings Inc., the reinsurer seeking a buyer, said it has entered discussions with an additional unidentified party after a deal to merge with Allied World Assurance Co. Holdings AG was scrapped.

Private-equity fund manager Christopher Flowers may be part of the group including Enstar Group Ltd. and C.V. Starr & Co. that is now in talks with New York-based Transatlantic, the Insurance Insider reported today. The publication said last month that Joseph Brandon, the former chief executive officer of Berkshire Hathaway Inc.’s General Re, is also bidding. Validus Holdings Ltd., the Bermuda-based reinsurer, has disclosed making an offer and said that it entered a confidentiality agreement.

Transatlantic is negotiating with potential bidders as Michael Sapnar prepares to succeed Robert F. Orlich as the reinsurer’s CEO. American International Group Inc. previously owned a majority stake in Transatlantic, which it sold in two public offerings after being bailed out in 2008.

A plan to merge with Allied World was scuttled last month after Transatlantic’s largest shareholder, Davis Selected Advisers LP, said that it would oppose the transaction. Transatlantic also walked away last month from a $3.25 billion bid from National Indemnity Co., a unit of Berkshire.

Validus’s cash-and-stock offer values Transatlantic at about $47.95 a share, or about $3 billion, based on yesterday’s closing share price for the bidder. Transatlantic advanced 27 cents to $50.37 at 9:39 a.m. in New York Stock Exchange composite trading.

Starr, Enstar

An assistant to Flowers declined to comment in an e-mail. Calls weren’t immediately returned by representatives of Transatlantic and C.V. Starr, the investment firm run by former AIG CEO Maurice “Hank” Greenberg. A spokesman couldn’t immediately be reached at Enstar, the Bermuda-based company that assumes risk from insurers seeking to exit the business.

“There can be no assurance that these discussions will result in a proposal or transaction,” Transatlantic said today in a statement disclosing the additional party. “Transatlantic does not intend to comment further regarding its discussions unless and until required by law or NYSE regulations.”

Goldman Sachs Group Inc. and Moelis & Co. are providing financial advice to Transatlantic, and Gibson, Dunn & Crutcher LLP is acting as legal counsel.

--Editors: Dan Kraut, William Ahearn

To contact the reporter on this story: Noah Buhayar in New York at nbuhayar@bloomberg.net

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


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