Validus “To Increase Transatlantic Offer”

Bermuda’s Validus may submit an increased acquisition offer for Transatlantic Holdings as soon as this weekend, industry journal “Insurance Insider’ is reporting, citing sources.

Transatlantic announced on October 11 that it has entered into a confidentiality agreement and commenced discussions with an additional party regarding potential strategic alternatives.

That agreement was in addition to the previously announced confidentiality agreements that Transatlantic entered into with Validus, National Indemnity Company and an additional undisclosed party.

Validus, which acquired IPC Holdings Ltd. in 2009, originally offered $55.95 a share to acquire Transatlantic in July and derailed a previously announced merger with Bermuda’s Allied World Assurance Company Holdings AG.

Under the original offer, Transatlantic holders would have received 1.5564 Validus common shares and $8 in cash for each share they held. That valued the offer at about $3.5 billion, based on New York-based Transatlantic’s 62.4 million shares outstanding as of March 31.

Transatlantic had agreed in June to merge with Allied in a stock transaction valued at $51.10 a share, or about $3.2 billion. Transatlantic’s biggest shareholder, Davis Selected Advisers LP, said on June 14 it would oppose the deal and approach other companies about alternatives.

Validus said its offer would create the world’s sixth- largest reinsurer, and the second-biggest in North America behind Warren Buffett’s Berkshire Hathaway Inc.

Par-La-Ville Road-based Validus focuses on property coverage, including protection against catastrophes. Transatlantic provides medical-malpractice protection and guards corporate officers against lawsuits through so-called directors-and-officers coverage. Allied — headquarted in Switzerland but with executive offices in Bermuda — offers professional-liability coverage.

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