Validus, Transatlantic Make Peace; Confidentiality Agreement Signed

After rejecting offers from both Allied World Assurance and Berkshire Hathaway’s National Indemnity, Transatlantic Holdings has opened the door to another formerly rejected suitor, Validus Holdings, Ltd.

The two companies have entered into a confidentiality agreement with, which paves the way for them to “exchange non-public information.”

Pursuant to that agreement, Validus said it “has agreed, during a period that expires at 11:59 p.m., Eastern time, on October 31, 2011, not to take or enter into an agreement with any third party regarding certain actions, including acquiring any additional shares of Transatlantic common stock, mailing a consent solicitation statement to Transatlantic stockholders or collecting consent cards with respect to Validus’ previously announced consent solicitation to remove and replace the current Transatlantic board of directors or seeking to call a special meeting of Transatlantic’s stockholders pursuant to Transatlantic’s by-laws.”

Validus had taken the above actions, when its offer was rejected by Transatlantic’s board, who, at the time, still hoped to be able to conclude the previously agreed to deal with Allied World.

Validus and Transatlantic have also agreed not to take any “action with respect to their pending litigation in the Chancery Court of Delaware and United States District Court for the State of Delaware during this period.”

Validus’ bulletin also stated: “The termination of the period will accelerate if, among other things, Transatlantic enters into an agreement with respect to an acquisition of Transatlantic or the Transatlantic board fails to recommend against any tender offer for Transatlantic common stock commenced by a third party.” It also acknowledged that “there can be no assurance that an agreement with respect to an acquisition by Validus for Transatlantic will be reached.”

After reaching the confidentiality agreement, Validus announced that it has “extended its Exchange Offer for all of the outstanding shares of common stock of Transatlantic to 5:00 p.m., Eastern time, on Monday, October 31, 2011, unless extended. As of 5:00 p.m., Eastern time, on Thursday, September 22, 2011, approximately 699 shares of Transatlantic common stock had been tendered in and not withdrawn from the Exchange Offer.”

Source: Validus Holdings, Ltd.