Reinsurer Transatlantic dismisses fresh Berkshire Hathaway offer

NEW YORK (Reuters)—Reinsurer Transatlantic Holdings Inc. said it received a renewed buyout offer of $52 a share in cash from Warren Buffett's Berkshire Hathaway Inc., but said the bid was too low.

Transatlantic shares fell 1.7% as the Berkshire rejection left only one—hostile—suitor at the table.

Transatlantic and Allied World Assurance Co. Holdings Ltd. called off their planned merger last Friday in the face of overwhelming opposition.

After that announcement, Berkshire reinsurance chief Ajit Jain sent Transatlantic a letter reiterating the offer his National Indemnity unit made in early August. The two sides had already been in talks, though not in recent days, under the terms of a confidentiality agreement.

The renewed offer, worth $3.25 billion, expires at the close of business Monday, and there appeared to be little chance Transatlantic would accept it. Berkshire said it would not renew its offer if it was not accepted by the deadline.

"The Transatlantic board of directors believes that selling Transatlantic for cash at the substantial discount to book value represented by the National Indemnity proposal simply would not deliver fair value to its stockholders," Transatlantic said in a statement on Monday.

Transatlantic said last Friday it expects its book value at the end of the third quarter to be $69 to $70 a share. In a presentation to investors, a copy of which it filed with securities regulators Monday, Transatlantic said the Berkshire offer undervalued it by any of seven different metrics used in insurance M&A deals.

A hostile offer for the company remains on the table from Validus Holdings Ltd. Validus has taken its offer directly to Transatlantic shareholders and has taken steps to replace Transatlantic's board.

Transatlantic on Friday said it would be open to friendly negotiations with Validus if the companies could come to terms on a confidentiality agreement. Monday's investor presentation included four pages of arguments from Transatlantic as to why it could not accept Validus' current offer.

Validus shares fell 1.9% to $24.84 in late-morning trading.