There seems to be a slight divergence of views between Validus Holdings and Allied World over the current status of their respective efforts to acquire Transatlantic Holdings, Inc.
Following Transatlantic’s decision to reject its latest offer, and to file a lawsuit against it to boot, Validus issued a statement reiterating that its offer is superior to Allied World’s. Chairman and CEO Ed Noonan expressed his company’s disappointment over the decision, but said he was “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.”
Noonan described the actions of Validus’ board as “nothing more than a poorly disguised attempt to prevent us from bringing our Superior Proposal to Transatlantic stockholders.” He also accused the board of taking “further steps to entrench themselves by establishing a poison pill, initiating meritless legal action, and changing corporate by-laws in an apparent effort to more easily manipulate stockholder meetings. These actions appear to be intentionally designed to trample on the rights of Transatlantic’s stockholders.
“Validus believes that these actions by the Transatlantic directors – willfully burying their heads in the sand and blaming it on their ill-advised acquisition agreement with Allied World – are inconsistent with their fiduciary duties to Transatlantic’s owners,” Noonan continued. “Transatlantic is spreading misinformation about Validus’ Superior Offer in an effort to hide the simple fact that Validus’ offer provides greater market value than the inferior Allied World takeover offer.”
Allied World seemed untroubled by Noonan’s accusations, issuing a statement that reaffirmed Validus’ decision to recommend the Transatlantic and Allied World merger. “We fully support the Transatlantic Board’s decision to once again recommend our merger agreement to shareholders and are pleased to learn that the Transatlantic Board rejected the Validus offer after review with outside advisors,” Allied said.
“We believe our transaction provides the best immediate and long-term value and strategic benefits for all shareholders. The creation of TransAllied offers shareholders a compelling strategic rationale with superior insurance capabilities, superior currency and demonstrated record of value creation, a stronger credit profile and risk management platform, and mutually beneficial synergies,” the company added.
It also noted that Allied’s representatives have “spoken to many shareholders of both Allied World and Transatlantic to assure them of our commitment and to review the economics and strategic rationale for this combination.”
It described the responses as positive, and indicated that it “will continue to proactively engage with shareholders,” as well as going forward with “integration planning,” contacting regulators and rating agencies.
Noonan’s response was to continue Validus’ attack on Transatlantic’s Board, which he accused of having “no intention to enter into good-faith discussions with Validus about maximizing value for Transatlantic stockholders.
“We will not be deterred by the Transatlantic’s Board’s irresponsible tactics of entrenchment and are determined to complete our Superior Proposal for the benefit of Transatlantic’s stockholders,” he continued. “Validus continues to urge Transatlantic stockholders to make their voices heard and send a message to their Board by rejecting the proposed Allied World takeover offer and tendering their shares into Validus’ Exchange Offer.”
Source: Allied World Assurance Company Holdings and Validus Holdings
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