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Transatlantic Says No to Berkshire Hathaway's Bid

Source: WSJ - Erik Holm

Posted on 19 Sep 2011

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Reinsurer Transatlantic Holdings Inc. dismissed as "opportunistic" another takeover offer from Berkshire Hathaway Inc. after Warren Buffett's firm failed to increase its bid.

Transatlantic said Monday that Mr. Buffett's insurance lieutenant, Ajit Jain, approached the New York-based reinsurer last Friday, the day Transatlantic announced it had shelved a planned merger with Allied World Assurance Co. Mr. Jain's offer to buy Transatlantic for $52 a share, or about $3.25 billion, was unchanged from a bid he submitted to Transatlantic in August.

Transatlantic had said previously the price was inadequate, and repeated Monday that the offer "simply would not deliver fair value to its stockholders."

Transatlantic's rejection of the deal seemingly closes the book on the possibility of an acquisition by Berkshire, since Mr. Jain has repeatedly declined to increase his bid and Transatlantic has said the offer was "less compelling" than a hostile bid from a third suitor. In a letter to Transatlantic Chief

Executive Robert Orlich, Mr. Jain wrote Friday that Berkshire's offer expired at the close of business Monday and would not be renewed.

Transatlantic said last week it also remains opposed to the offer from the third suitor, Validus Holdings Ltd. Validus has taken its takeover fight directly to Transatlantic shareholders, attempting to win their support to replace Transatlantic's board with a hand-picked slate that would be more open to Validus's entreaties.

Mr. Jain said in his letter that Berkshire would not take its offer directly to Transatlantic shareholders.

After Allied World and Transatlantic canceled their merger, Transatlantic Chairman Richard Press said Transatlantic remains willing to negotiate with potential partners, but completing a merger "is not an imperative."

Allied World and Transatlantic called off their deal after it became clear shareholders were going to vote it down. Shareholder-advisory firm Institutional Shareholder Services urged investors to reject the merger and Transatlantic's largest investor, Davis Selected Advisors, said it was voting against it. Davis owned 23.6% of Transatlantic's stock as of Aug. 23, according to FactSet, and controls voting authority on about 10%.