NEW YORK (Reuters)—The three-way bidding war for reinsurer Transatlantic Holdings Inc. grew more complicated on Thursday as hostile suitor Validus Holdings Ltd. sued the company, but also offered to open its own books for review.

The dual moves were designed to raise the pressure on Transatlantic, which has stuck with a deal with Allied World Assurance Co. Holdings Ltd. despite subsequent larger offers from Validus and Warren Buffett's Berkshire Hathaway Inc.

Validus' Delaware suit against Transatlantic, its board and Allied World is designed to stop the Allied deal until Validus can enter into talks with Transatlantic, in part through a declaration that Validus does not need to sign a standstill agreement as a condition of those talks.

Such an agreement would keep Validus from pursuing a hostile bid or opposing the Allied World deal in the event talks were unsuccessful.

The 61-page suit was full of blunt language, as when Validus asked the court "to compel the (defendants) to fulfill their fiduciary duties to Transatlantic's stockholders and stop burying their heads in the sand."

Validus went on to allege that Transatlantic's directors had only limited shareholdings in the company and were acting solely to guarantee themselves better-paying jobs on a combined TransAllied board.

A Transatlantic spokesman could not immediately comment.

In a filing with securities regulators, Validus also disclosed a letter it sent to Transatlantic management on Wednesday, offering the company a chance to review Validus' books without Transatlantic opening its own books in return.

The review of information has been a major sticking point in the deal. Transatlantic agreed to a deal in June with Allied World, but determined in July that Validus' unsolicited bid could lead to a superior offer.

At that time, Transatlantic asked Validus to sign a confidentiality agreement that included a standstill provision. Validus refused to sign the agreement and took its bid directly to shareholders.

Transatlantic subsequently sued Validus for allegedly misleading shareholders. Transatlantic has also been sued by its shareholders, and its largest shareholder has publicly said it may oppose the Allied deal.

Amid the legal maneuvering, the fight was complicated last weekend when Berkshire made an unsolicited bid.

Transatlantic has said that offer could also lead to a superior proposal, and it has asked Berkshire to engage in talks. Mr. Buffett's conglomerate has not made a public response.

In afternoon trading, Transatlantic shares rose 1.7% to $50.17, Validus rose 5.9% to $25.45 and Allied World rose 3.7% to $52.65.

At those prices, Validus' cash-and-stock offer is worth $2.97 billion and Allied World's all-stock bid is worth $2.89 billion. Both are a discount to Transatlantic's current share price and book value.