Validus appeals directly to Transatlantic shareholders to accept buyout

NEW YORK—Bermuda reinsurer Validus Holdings Ltd. on Monday appealed directly to shareholders of Transatlantic Holdings Inc. to accept its unsolicited $3.5 billion bid rather than the $3.2 billion buyout proposal by Allied World Assurance Co. Holdings A.G.

Validus said that as a precondition of discussing its proposal, Transatlantic wanted an agreement that would contractually prohibit Validus from pursuing its bid without the approval of New York-based Transatlantic’s board.

“This position is inconsistent with the Transatlantic board’s previously announced determination that the failure to enter into discussions with Validus would result in a breach of its fiduciary duties, and would effectively give the Transatlantic board a veto over our transaction which we cannot accept,” Validus Chairman and CEO Ed Noonan said in a statement.

Validus details offer

In a Monday filing with the Securities and Exchange Commission, Validus detailed its offer of 1.5564 Validus voting common shares and $8 in cash per Transatlantic share. When announced, the deal was worth about $3.5 billion.

Transatlantic had agreed to a merger of equals with Zug, Switzerland-based Allied World Assurance Co. in a deal worth about $3.2 billion.

Validus made its unsolicited bid for Transatlantic soon afterward, and received a reply that the board was unimpressed but open to negotiations.

Validus said its offer is valid until 5 p.m. Sept. 30.