Transatlantic says will enter discussions with Berkshire Hathaway unit

NEW YORK—Transatlantic Holdings Inc. has said it will enter into discussions with Berkshire Hathaway Inc. subsidiary National Indemnity Co. about its offer to buy Transatlantic.

National Indemnity, the main insurance unit of Omaha, Neb.-based Berkshire Hathaway, on Sunday made an offer to buy Transatlantic for about $3.2 billion.

In a statement late Monday, Transatlantic said it believed National Indemnity’s offer was not superior to a previous offer to buy the company made by Zug, Switzerland-based Allied World Assurance Holdings Co. A.G. and accepted by Transatlantic.

But Transatlantic said it would be a breach of its fiduciary duty not to enter into discussions with National Indemnity because it is “reasonably likely” that National Indemnity’s bid may lead to a superior proposal.

In the statement, Transatlantic said it reaffirmed its recommendation of the AWAC merger agreement.

Hamilton, Bermuda-based Validus Holdings Ltd. in July made a rival bid for Transatlantic.

Transatlantic is suing Validus, accusing it of making false and misleading statements.