NU Online News Service, Aug. 26, 1:35 p.m. EST
Davis Selected Advisers Ltd., the largest shareholder of Transatlantic Holdings Inc., will oppose the company's acquisition by Allied World.
Tucson, Ariz.-based Davis Selected Advisers, owns 23.6 percent of Transatlantic.
“Davis Advisers has decided to oppose the proposed agreement and plan of merger with Allied World Assurance Co. Holdings,” says Davis in a filing with the U.S. Securities and Exchange Commission. “Davis Advisers believes that the current offer from Allied World Assurance Company Holdings is not in the best interest of maximizing value for shareholders.”
In June New York-based Transatlantic and Switzerland-based Allied World announced a $3.2 billion merger agreement (based on Allied World's stock price at the time). The new company is to be called TransAllied.
The investment firm can only vote a 9.9 percent stake freely due to an agreement with New York regulators. The remaining shares are voted in a manner proportionate to the vote of the owners of the shares.
Allied World recently sent a letter to shareholders urging them to vote for the merger. Shareholders are due to vote on the proposal Sept. 20.
Meanwhile, Bermuda's Validus Holdings, which has submitted an unsolicited stock and cash offer of $3.5 billion, is contacting shareholders of Transatlantic to urge them to vote against Transatlantic's merger agreement with Allied World. Transatlantic has rejected Validus' offer.
Berkshire Hathaway's National Indemnity Co. also entered the bidding war 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.”
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