Author Topic: TRH - Transatlantic Holdings  (Read 26704 times)

Alekbaylee

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TRH - Transatlantic Holdings
« on: August 08, 2011, 08:39:43 AM »
Anyone buying this as a short term play.
National Indemnity is offering $52 cash, and it's trading at less than $48 right now...

We may see a little (although unlikely) biding war between NA and Validus who is offering a mix of shares/cash for the same buyout.
« Last Edit: August 08, 2011, 10:46:54 AM by Parsad »


biaggio

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Re: Transatlantic Holdings - TRH
« Reply #1 on: August 08, 2011, 08:55:50 AM »
is this not the same holding as mentioned in one of the other posts which indicated that BRK had bid $3.8b in cash for TRH )also $52(??)

and did they not agree to $52 in stock not cash (so there is a risk)...if it was cash it would be a no brainer. Am I correct?

Alekbaylee

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Re: Transatlantic Holdings - TRH
« Reply #2 on: August 08, 2011, 10:18:38 AM »
Hmm... You may be right Biaggio, although it's hard to tell from this

Transatlantic Holdings, Inc. confirmed that Transatlantic has received a proposal from National Indemnity Company (National Indemnity), a member of the group of insurance companies of Berkshire Hathaway Inc., to acquire all of Transatlanticís outstanding shares of common stock for $52.00 per share. Consistent with its fiduciary duties, Transatlanticís Board of Directors, in consultation with its independent legal and financial advisors, will carefully consider and evaluate the proposal from National Indemnity and will inform Transatlantic stockholders of the Boardís position. Transatlantic advises stockholders to take no action at this time and to await the Boardís recommendation.

biaggio

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Alekbaylee

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Re: TRH - Transatlantic Holdings
« Reply #4 on: August 08, 2011, 08:41:17 PM »
TRH willing to review NI offer :

Transatlantic Holdings, Inc. announced that its Board of Directors, after consultation with its independent financial and legal advisors, has determined that the proposal set forth in the letter received on August 5, 2011, from National Indemnity Company (National Indemnity), a member of the group of insurance companies of Berkshire Hathaway Inc., to acquire all of the outstanding shares of Transatlantic common stock for $52.00 per share does not constitute a Superior Proposal, but is reasonably likely to lead to a Superior Proposal, under the merger agreement that Transatlantic entered into with Allied World Assurance Company Holdings, AG on June 12, 2011 (the Allied World Merger Agreement), and that the failure to enter into discussions regarding the National Indemnity proposal would result in a breach of its fiduciary duties under applicable law. As a result, the Transatlantic Board determined to offer to engage in discussions and to exchange information with National Indemnity. While the Board determined that the National Indemnity proposal is reasonably likely to lead to a Superior Proposal, there can be no assurance that the National Indemnity proposal will result in a Superior Proposal or that any transaction with National Indemnity will result from the National Indemnity proposal or Transatlanticís discussions with National Indemnity.

http://www.reuters.com/finance/stocks/TRH/key-developments/article/2379566

Alekbaylee

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Re: TRH - Transatlantic Holdings
« Reply #5 on: August 09, 2011, 06:52:07 AM »
Here's a clearer picture of the situation. There are actually sort of 3 potential buyers of TRH, and NI is the only one offering $52 cash for it.

Berkshire Hathaway Inc.'s (NYSE: BRK-A) subsidiary National Indemnity Co. made a $3.2 billion buyout offer for Transatlantic Holdings Inc (NYSE: TRH), topping two existing rival bids for the reinsurer. Transatlantic confirmed today it has received a proposal to acquire all of Transatlantic's outstanding shares of common stock for $52.00 per share. After the confirmation, a rival bidder, Validus Holdings Ltd. (NYSE: VR), urged Transatlantic's board of directors to enter into discussions with Validus. Validus has proposed to acquire Transatlantic for 1.5564 Validus voting common shares and $8.00 per share in cash, which had a total value of $55.95 based on Validus' unaffected trading price as of July 12, 2011. Transatlantic also has an agreement to be bought by Allied World Assurance Company Holdings Ltd. (NYSE: AWH) in a deal currently worth $44.22 per share, or $2.75 billion. Buffett's bid values Transatlantic's shares at $52 apiece, a 15 percent premium to Friday's closing price of $45.24. BRK-A is down 1.69 percent to 105,482, while TRH is trading higher by 7.69 percent to $48.72 a share.


tombgrt

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Re: TRH - Transatlantic Holdings
« Reply #6 on: August 09, 2011, 07:04:53 AM »
TRH willing to review NI offer :

Transatlantic Holdings, Inc. announced that its Board of Directors, after consultation with its independent financial and legal advisors, has determined that the proposal set forth in the letter received on August 5, 2011, from National Indemnity Company (National Indemnity), a member of the group of insurance companies of Berkshire Hathaway Inc., to acquire all of the outstanding shares of Transatlantic common stock for $52.00 per share does not constitute a Superior Proposal, but is reasonably likely to lead to a Superior Proposal, under the merger agreement that Transatlantic entered into with Allied World Assurance Company Holdings, AG on June 12, 2011 (the Allied World Merger Agreement), and that the failure to enter into discussions regarding the National Indemnity proposal would result in a breach of its fiduciary duties under applicable law. As a result, the Transatlantic Board determined to offer to engage in discussions and to exchange information with National Indemnity. While the Board determined that the National Indemnity proposal is reasonably likely to lead to a Superior Proposal, there can be no assurance that the National Indemnity proposal will result in a Superior Proposal or that any transaction with National Indemnity will result from the National Indemnity proposal or Transatlanticís discussions with National Indemnity.

http://www.reuters.com/finance/stocks/TRH/key-developments/article/2379566

Doesn't that mean TRH wants to stall things a bit to see where the stockprice of AG will land? Or do I misunderstand it?  :-X

Alekbaylee

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Re: TRH - Transatlantic Holdings
« Reply #7 on: August 09, 2011, 07:57:29 AM »
I think management is doing its fiduciary duty which means getting the better deal for the shareholders. Last time I checked, book value of TRH was around $60, so all the bids are low IMO. Will be interesting to see how this saga plays out...

twacowfca

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Re: TRH - Transatlantic Holdings
« Reply #8 on: August 09, 2011, 01:40:47 PM »
We kept patiently chipping away today and finally put 95% of our very large cash holdings into TRH.  The situation is nearly ideal for risk arbitrage.  A motivated seller with major long term shareholders pushing for a better offer for a target selling for less than 75% of BV.  A good business that's done relatively well over the last several years.

A cash offer from the most financially sound business on the planet for 5% above our average purchase price today.  A statement from TRH's CEO that the offer is likely to be improved substantially.  Almost zero risk of financial issues interfering with the funding.  Almost zero risk of buyer's remorse causing the buyer to pull the offer under any market conditions.  The most friendly possible new boss for the current management after the contemplated acquisition. Low regulatory risk . . . And the plusses go on and on.  :)

onyx1

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Re: TRH - Transatlantic Holdings
« Reply #9 on: August 09, 2011, 04:05:36 PM »
TWA- What do you think is the basis for Orlich's characterization of BRK's all-cash $52 offer as one that "does not constitute a superior proposal", when AWD's all-stock was $44 at the time?  Substaintive, or posturing for a better offer?  What do you think is the chance of BRK sticking to their mantra of not participating in auctions and walking away?