Transatlantic shareholders sue over proposed Alleghany takeover
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NEW YORK—A class action lawsuit has been filed against Transatlantic Holdings Inc. in which shareholders allege that the New York reinsurer's agreement to be taken over by Alleghany Corp. for $3.4 billion violates the board's fiduciary duties.
Following a lengthy takeover battle involving several companies, Transatlantic agreed Monday to a cash-and-stock deal with New York investment holding company Alleghany that is expected to close in the first quarter of 2012. Under the agreement, Transatlantic is to become a stand-alone subsidiary.
Transatlantic investor Marilyn Clark filed the suit Tuesday in New York State Supreme Court. It alleges the dealmakers pursued a sale “at an unfair price through an unfair and self-serving process.”
Marilyn Clark et al. vs. Transatlantic Holdings Inc. also alleges that individual defendants, such as Transatlantic CEO and Director Robert Orlich, “botched the sale of the company from the start.”
Reacting to the litigation, a Transatlantic spokesman said, “The company believes the suit is completely without merit."
Alleghany could not be immediately reached for comment.
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