Buffett Unit Offers $3.25B for Transatlantic
Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) offered about $3.25 billion to buy Transatlantic Holdings Inc. (TRH), the reinsurer previously owned by American International Group Inc. (AIG)
Berkshire unit National Indemnity Co. offered $52 each for the approximately 62.48 million shares outstanding of the New York-based reinsurer. The agreement isn’t subject to either a due diligence review or financing conditions, according to a copy of the offer to Transatlantic Chief Executive Officer Robert Orlich and released by the company. Transatlantic shares fell 3.6 percent to close at $45.24 in New York Stock Exchange trading Aug. 5. The shares have declined 12 percent so far this year.
Transatlantic’s board will “carefully consider and evaluate” the proposal, the company said in a statement today.
Ajit Jain, president of Berkshire’s reinsurance division, asked for a formal response from Orlich by the close of business tomorrow and a breakup fee of $75 million if the acquisition doesn’t close after an agreement is reached.
Separately, Transatlantic is facing challenges from shareholders on its previously planned merger with Allied World Assurance Company Holdings AG. Allied struck a deal in June to exchange 0.88 of a share for each Transatlantic share in a deal valued at $3.2 billion, based on prices at the time.
Transatlantic has also rebuffed an offer from Validus Holdings Ltd. (VR) to break up the deal with Zug, Switzerland-based Allied.
Transatlantic sued Validus last month, saying that the rival company was trying to mislead stockholders into tendering their shares in violation of securities law, according to court records.
Transatlantic spokeswoman Joele Frank and spokesman Anthony Herrling did not immediately return telephone calls and e-mails seeking comment.
source: bloomberg.com
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