Validus Withdraws Its Transatlantic Offer
After a six month-long hostile takeover battle, reinsurer Bermuda’s Validus Holdings today [Nov. 28] said that it has withdrawn its $3.5-billion cash and stock offer for rival Transatlantic Holdings.
In a filing with the US Securities and Exchange Commission, Hamilton-headquartered Validus said it would return about 7.7 million Transatlantic shares, representing a 13.4-per cent stake in the company, tendered in the offer to the shareholders.
The withdrawal came after Transatlantic last week agreed to sell itself to property and casualty insurer Alleghany Corp for $3.4 billion.
Transatlantic, once majority-owned by American International Group [AIG], had repeatedly rejected Validus hostile bid and also rebuffed a August $3.24-billion takeover offer from National Indemnity Co, a unit of Warren Buffett’s Berkshire Hathaway.
National had offered to buy New York-based Transatlantic for $52 a share, but Transatlantic already had signed a deal in June to be acquired by Switzerland’s Allied World Assurance Company Holdings in a $44.22 per share transaction, or $2.75 billion.
This deal fell apart in September, after Transatlantic’s largest shareholder opposed the merger on the grounds that the two unsolicited bids from Validus and National Indemnity were higher than that of Allied World.
Transatlantic had rejected Validus offer terming it as too low and also filed a suit against Validus, alleging that Validus is in violation of securities laws in its proxy and tender offer materials to stockholders.
Earlier this month Validus CEO Ed Noonan [pictured at top] said the the total value of the Bermuda reinsurer’s last offer – based on the company’s closing share price on November 11, is $58.001 per Transatlantic Holdings, Inc. share — provided “compelling and full and fair value” to Transatlantic stockholders.
AIG had sold its entire 60-per cent stake in Transatlantic in 2009 in order to repay the US government loans during the global financial crisis.
Transatlantic offers reinsurance for a full range of property, casualty products, including general liability, medical malpractice, architects’ and engineers’ liability, automobile liability, and surety lines.
Transatlantic reported $3.88 billion in net written premiums for 2010. The reinsurer posted net income of $402 million on revenues of $4.3 billion last year.
In a recent commentary, “The Wall Street Journal” suggested that by going hostile in its takeover attempt, Bermuda’s Validus Holdings may have doomed its bid to acquire Transatlantic.
A provider of reinsurance and insurance, Validus Holdings Ltd. conducts its operations worldwide through two wholly-owned subsidiaries, Validus Reinsurance, Ltd. and Talbot Holdings Ltd.
Validus Re is a Bermuda based reinsurer focused on short-tail lines of reinsurance. Talbot is the Bermuda parent of the specialty insurance group primarily operating within the Lloyd’s insurance market through Syndicate 1183.
