Validus Announces Transatlantic Merger Proposal

July 14, 2011

Bermuda based Validus Holdings Ltd., Tuesday [July 12] announced that it has delivered to the Board of Directors of Transatlantic Holdings, Inc. a proposal to merge the businesses of Validus and Transatlantic. Pursuant to the proposal, Transatlantic stockholders would receive 1.5564 Validus voting common shares in the merger and $8.00 in cash per share pursuant to a one-time special dividend from Transatlantic immediately prior to closing of the merger for each share of Transatlantic common stock they own.

Based on today’s closing prices, Validus’ proposal would provide total consideration of $55.95 per Transatlantic share, representing a 12.1% premium to the value of Transatlantic’s previously announced proposed acquisition by Allied World Assurance Company Holdings, AG as of July 12, 2011. Validus’ proposal also represents a 27.1% premium to Transatlantic’s closing price on June 10, 2011, the last trading day prior to Transatlantic’s announcement of its proposed acquisition by Allied World, and a 14.1% premium to Transatlantic’s closing price as of July 12, 2011.

In addition to the meaningful premium and cash consideration, the proposed transaction with Validus is structured to be tax-free to Transatlantic stockholders with respect to the Validus voting common shares they receive in the merger [unlike the fully-taxable proposed acquisition of Transatlantic by Allied World].

“Our proposal represents a compelling strategic combination that will generate superior value for both Validus and Transatlantic shareholders. We will create a broadly diversified global reinsurance leader,” stated Ed Noonan, Validus’ Chairman and Chief Executive Officer. “The combination of Validus’ strong positions in Bermuda and London with Transatlantic’s profile in the United States, continental Europe and Asia will produce a rare example of a complementary business fit with minimal overlap.”

“Combining a leader of the short tail reinsurance market with a leader of the long tail market creates a franchise properly balanced to manage the reinsurance underwriting cycle. Validus has a superior business plan that will drive earnings by capturing the best priced segments of the reinsurance market while strengthening Transatlantic’s balance sheet to position it to better withstand the remaining leg of the soft casualty pricing cycle.”

Validus is fully committed to completing a transaction with Transatlantic and believes its proposal clearly constitutes a “Superior Proposal” under the terms of Transatlantic’s merger agreement with Allied World. Validus would expect the Board of Directors of Transatlantic to engage promptly in discussions with Validus regarding its proposal, as is permitted by the merger agreement.

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