Validus Holdings Ltd., one of the companies fighting to take over reinsurer Transatlantic Holdings Inc., alleged in a lawsuit Thursday that Transatlantic board members spurned its initial approach because they feared for their jobs.
The board members and executives instead agreed to a merger with Allied World Assurance Co. because Allied World was "willing to continue their lucrative and prestigious roles as directors and officers in a public company," Validus alleged in a lawsuit filed in Delaware Chancery Court.
Validus said in the lawsuit that it had contacted Transatlantic about a possible deal as long ago as 2008 and as recently as June 7. Transatlantic announced the deal with Allied World on June 12.
The lawsuit alleges that Transatlantic board members and executives may have feared for their jobs because Validus ousted board members and executives when it completed a hostile takeover of rival IPC Holding Ltd. in 2009.
Because Transatlantic board members didn't respond to Validus's formal approach in early June, the suit said, they "had no way of knowing that Validus intended to keep senior Transatlantic management intact."
Transatlantic was approached with a third takeover offer by Warren Buffett's Berkshire Hathaway Inc. last week. As with Validus, Transatlantic said the
Berkshire offer wasn't "superior" to the Allied World offer, but indicated it intended to enter into a confidentiality agreement with Berkshire to negotiate further.
A Transatlantic representative had no immediate comment.