National Indemnity Bids For Transatlantic

August 8, 2011

A unit of Warren Buffett’s Berkshire Hathaway Inc. entered into the bidding war over Transatlantic Holdings Inc, offering to buy the reinsurer for $3.24 billion. Transatlantic has an agreement to be bought by Allied World, and Validus is also bidding for the company.

Transatlantic confirmed they received a proposal from National Indemnity Company to acquire all of Transatlantic’s outstanding shares of common stock for $52 per share, and said they “will carefully consider and evaluate the proposal from National Indemnity and will inform Transatlantic stockholders of the Board’s position.”

Validus Holdings Ltd. yesterday [Aug.7] issued a statement saying, “Validus observes that Transatlantic stockholders now have two potential alternatives that deliver greater market value than the Allied World takeover offer.”

“Validus urges the Transatlantic Board to immediately remove the obstacles it has erected in an effort to prevent Transatlantic’s stockholders from receiving the greatest value for their stock. Validus calls upon the Transatlantic Board to enter into discussions with Validus without restrictive pre-conditions.”

Ed Noonan, Chairman and CEO of Validus, said: “Validus reiterates its commitment to its offer for Transatlantic, which provides Transatlantic stockholders with the opportunity to participate in the significant long-term value creation of the combined company.”

“While the National Indemnity offer acknowledges the value of the Transatlantic franchise, it fails to provide Transatlantic stockholders with any participation in the upside of the combined company. We believe Transatlantic stockholders deserve the right to choose for themselves between an offer that provides greater potential future value or a fixed price today.”

Allied World also issued a statement in response to National Indemnity Company’s proposal.

President and CEO Scott Carmilani said, “We reaffirm our full commitment to the terms of the Allied World/Transatlantic Holdings merger agreement.”

“We believe this combination provides superior financial and strategic benefits and the opportunity for shareholders of both of our companies to participate in the considerable upside potential of the combined company.”

“In contrast, National Indemnity’s proposal is, at best, opportunistic and seeks to acquire Transatlantic for cash at a significant discount to book value, leaving Transatlantic shareholders no upside potential.”

“We are on target to close our merger of equals transaction as quickly as possible in the fourth quarter and look forward to, together, generating attractive long term returns for our shareholders,” continued Mr Carmilani.

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