NU Online News Service, Aug. 9, 11:11 a.m. EST

Transatlantic Holdings says the acquisition proposal it received from Berkshire Hathaway subsidiary National Indemnity Co. is not better than the merger agreement it has in place with Allied World Assurance Co. Holdings.

But it could be.

Therefore, Transatlantic says it will offer to speak more with National Indemnity since the offer “is reasonably likely to lead to a ‘Superior Proposal,’” the New York-based company’s board concludes.

National Indemnity offered to pay $52 per Transatlantic share, valued at about $3.25 billion.

Transatlantic shares were at $48.31 at the close of the market on Aug. 8.

Ajit Jain, reinsurance division president of Warren Buffett-owned Berkshire Hathaway, gave Transatlantic until the end of business day yesterday to respond to the offer.

Transatlantic says it is giving a three-day notice to Allied World of their intent to talk with National Indemnity, and will make a confidentiality agreement available to National Indemnity before exchanging more information.

Such an agreement was not suitable to Validus, who was first to come in with an unsolicited offer for Transatlantic after its merger agreement with Allied World was announced in June. The new company would be named TransAllied.

Validus says it did not agree with a “standstill provision” within the confidentiality agreement and took its offer directly to Transatlantic shareholders despite the offer being rejected by Transatlantic. Transatlantic also filed a lawsuit against Validus alleging that Validus has made false and misleading statements to Transatlantic’s stockholders.

In a statement Allied World President and CEO Scott Carmilani says its agreement with Transatlantic “provides superior financial and strategic benefits and the opportunity for shareholders of both of our companies to participate in the considerable upside potential of the combined company.”

National Indemnity’s offer is “at best, opportunistic and seeks to acquire Transatlantic for cash at a significant discount to book value,” Carmilani adds.

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