A UNIT of Warren Buffett’s Berkshire Hathaway jumped into the bidding war over Transatlantic Holdings, offering to buy the reinsurer for $3.24bn (£1.98bn).
Transatlantic’s board said yesterday it would “carefully consider and evaluate” the $52-per-share offer by Berkshire unit National Indemnity.
Buffett’s bid tops two rival offers put before Transatlantic.
Transatlantic has an agreement to be bought by Allied World Assurance in a deal currently worth $44.22 per share, or $2.75bn.
Validus Holdings, meanwhile, has launched a hostile bid for Transatlantic, with a proposal currently worth $46.36 per share, or $2.89bn.
Buffett’s bid values Transatlantic’s shares at $52 apiece, a 15 per cent premium to Friday’s closing price of $45.24 on the New York Stock Exchange.
Yesterday, Transatlantic’s board backed its recommendation of the agreement with Allied World and advised shareholders to await the board’s decision regarding the Buffett proposal before taking any action.
Goldman Sachs and Moelis are acting as financial advisers and Gibson, Dunn & Crutcher is acting as legal counsel to Transatlantic.
Allied World and Validus have been canvassing shareholders to drum up support for their proposals.
Allied World has been making the case that its deal with Transatlantic would save money and create a company with a better risk profile.
It says Transatlantic shareholders also would get a speciality insurance business with its plan.
City A.M. Reporter