Since, Bermuda's Validus and Transatlantic have feuded over provisions in a confidentiality agreement and talks have stalled over what Validus calls a “meritless legal argument over a standstill provision.” The companies have traded lawsuits—Validus alleging Transatlantic is breaching its fiduciary duty and Transatlantic alleging Validus has made false and misleading statements to Transatlantic's stockholders.

Enter Berkshire Hathaway's National Indemnity Co., which came in with a cash offer of $52 per Transatlantic share. Transatlantic entered talks with the Warren Buffett-owned company after saying the original offer was not a “superior offer.”

In the letter from Validus Chairman and Chief Executive Officer Edward J. Noonan to Transatlantic shareholders, they are told to reject the merger with Allied World, as it “represents a flawed value proposition.”

Shareholders are due to vote on the proposal Sept. 20.

“Validus' offer provides superior market value and the opportunity in the future upside potential of a combined company that will be a global leader in reinsurance and a continued leader in property catastrophe reinsurance,” Noonan says in the letter.

Allied World has sent a letter to its shareholders urging them to vote for the merger agreement. The new company would be called TransAllied Group Holdings—described as a potential specialty-focused insurance and reinsurance company.

“Your board of directors unanimously supports the merger and believes the combination will deliver the best long-term value for shareholders of both companies,” says Allied World to shareholders.