NU Online News Service, Aug. 15, 1:37 p.m. EDT
Transatlantic Holdings Inc. says it has entered into a confidentiality agreement with Berkshire Hathaway's National Indemnity Co. and has entered into discussions with the Warren Buffett-owned company.
It is the latest chapter in the battle to acquire New York-based international reinsurer Transatlantic, which has had a merger agreement in place with Allied World Assurance Co. since June.
The new enterprise is to be called TransAllied.
However, Validus swung in with an unsolicited offer in July and, most recently, National Indemnity says it would pay $52 per share for all of the outstanding shares of Transatlantic.
Transatlantic told National Indemnity its $52 per share offer is not a “superior proposal,” but it has the potential to lead to one.
Validus and Transatlantic have since traded lawsuits, as Transatlantic rejected Validus' merger offer. Negotiations have broken down over differences in opinion about a “standstill provision” within the confidentiality agreement.
Transatlantic says its confidentiality pact with National Indemnity includes the standstill provision.
In a presentation to shareholders, Transatlantic says its merger with specialty insurer Allied World creates a diversified global company. Shareholders retain a majority (58 percent) of ownership.
Shareholders maintain 48 percent ownership in the Validus offer and an overlap in operations could mean loss of jobs, according to Transatlantic's presentation.
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