Allied World & Transatlantic Terminate Agreement
Bermuda-based Allied World Assurance Company Holdings has mutually agreed with Transatlantic Holdings to terminate their previously announced merger agreement. The Special Meeting of Allied World shareholders, which was scheduled to be held on September 20, 2011, has been cancelled.
Under the terms of the termination agreement, Allied World will receive a termination fee of $35 million plus $13.3 million of merger-related expenses. Transatlantic will also be obligated to pay Allied World an additional $66.7 million if within 12 months of the termination Transatlantic enters into an agreement providing for a competing transaction, or recommends or submits a competing transaction to its shareholders for adoption, or a transaction in respect of a competing transaction is consummated.
Allied World Chairman, President & Chief Executive Officer, Scott Carmilani, stated, “Although disappointed we were unable to complete the proposed merger with Transatlantic, Allied World’s core business strategy remains intact.”
“We continue to profitably grow our business by building on our solid foundation of broad specialty product capabilities, strong distribution relationships and a team of professionals that are well respected throughout the insurance and reinsurance industry.”
“As we approach our tenth anniversary, our shareholders remain our top priority and we will continue to make strategic decisions with their interest in mind and with the same consideration that has allowed us to grow the company’s book value per share by 140% since we went public in 2006.
“Finally, I would like to take this opportunity to thank Transatlantic and the employees and management teams of both of our companies who have worked diligently on integration planning over the past few months,” Mr. Carmilani concluded.
On Wednesday, Validus – which is pursuing a hostile takeover of the company – filed a consent solicitation to remove the Transatlantic directors and replace them with people it believes are more willing to auction the company.
