Transatlantic, Validus at odds over unsolicited acquisition offer

Transatlantic Holdings Inc. is recommending stockholders reject Validus Holdings Ltd.’s unsolicited, $3.5-billion offer to acquire all the outstanding common shares of Transatlantic.
The Validus offer follows a previously announced, $3.2-billion offer for Transatlantic in June 2011 by Allied World Assurance Company Holdings AG.
Transatlantic’s board says it believes the Allied World offer “will provide greater long-term value potential” than the Validus offer.
In addition, Transtlantic expressed a number of reservations about the unsolicited Validus offer in a public statement on the company’s Web site, posted on July 28.
Among them, Transatlantic asserts the Validus offer “is based on erroneous assumptions that are not supported by diligence; poses significant uncertainty with respect to ratings outcome; includes meaningful uncertainties; and has a high level of conditionality.”
Validus, meanwhile, says “Transatlantic is spreading misinformation about Validus’ superior offer in an effort to hide the simple fact Validus’ offer provides greater market value than the inferior Allied World takeover offer.”
The two companies appear to be headed to court over their differences.
Transatlantic has filed a lawsuit against Validus in the United States District Court for the District of Delaware, alleging that Validus violated the securities laws by making false and misleading statements to Transatlantic’s stockholders in Validus’ proxy and tender offer materials.
The lawsuit seeks to compel Validus to correct alleged misstatements and omissions made in its recent public filings so that Transatlantic stockholders can make an informed decision regarding the Validus exchange offer.
In a public statement, Validus said it was not surprised by Transatlantic’s actions, describing the legal action as “meritless.”
“We are disappointed but not surprised by today’s response from the Transatlantic board, particularly given their prior demand that we agree to a restrictive standstill before entering into discussions regarding our superior proposal,” Ed Noonan, chairman and CEO of Validus, said in a statement posted on the company Web site. “We believe their insistence on a standstill agreement is nothing more than a poorly disguised attempt to prevent us from bringing our superior proposal to Transatlantic stockholders.”