NU Online News Service, Aug. 26, 1:35 p.m.EST

Davis Selected Advisers Ltd., the largest shareholder ofTransatlantic Holdings Inc., will oppose the company's acquisitionby Allied World.

Tucson, Ariz.-based Davis Selected Advisers, owns 23.6percent of Transatlantic.

“Davis Advisers has decided to oppose the proposed agreement andplan of merger with Allied World Assurance Co. Holdings,” saysDavis in a filing with the U.S. Securities and Exchange Commission.“Davis Advisers believes that the current offer from Allied WorldAssurance Company Holdings is not in the best interest ofmaximizing value for shareholders.”

In June New York-based Transatlantic and Switzerland-basedAllied World announced a $3.2 billion merger agreement (based on Allied World'sstock price at the time). The new company is to be calledTransAllied.

The investment firm can only vote a 9.9 percent stake freely dueto an agreement with New York regulators. The remaining shares arevoted in a manner proportionate to the vote of the owners of theshares.

Allied World recently sent a letter to shareholders urging themto vote for the merger. Shareholders are due to vote on theproposal Sept. 20.

Meanwhile, Bermuda's Validus Holdings, which has submitted anunsolicited stock and cash offer of $3.5 billion, is contacting shareholders of Transatlanticto urge them to vote against Transatlantic's merger agreement with AlliedWorld. Transatlantic has rejected Validus' offer.

Berkshire Hathaway's National Indemnity Co. also entered thebidding war with a cash offer of $52 per Transatlantic share.Transatlantic entered talks with the Warren Buffett-owned company aftersaying the original offer was not a “superior offer.”