NEW YORK (AP) - Transatlantic Holdings Inc on Thursday said its board rejected a hostile takeover bid from fellow insurer Validus Holdings Ltd, and remained committed to go ahead with plans to combine the company with Switzerland-based Allied World Assurance Co Holdings AG.The board also adopted a one-year stockholder rights plan, commonly called a “poison pill”, a move used to avoid hostile takeovers.Bermuda-based Validus contended its target was “spreading misinformation” about its offer and maintained Transatlantic’s board would not take part in good-faith discussions.Before the market opened, New York-based Transatlantic announced the board’s decision, maintaining it was made “after consultation with its independent financial and legal advisers”.The company said it believed that the deal announced in June to combine with Allied World “will provide greater long-term value potential to Transatlantic’s stockholders”. It urged shareholders to reject the offer taken directly to them by Validus today.Transatlantic and Allied World agreed in June to combine in a deal they are calling a merger of equals. The companies say the combination, which calls for Transatlantic shareholders to receive a 58 percent stake in the combined company and for Transatlantic to name six of the 11 board members, will put them on better competitive footing because of the combined company’s larger size. The head of Allied World, Scott Carmilani, would be CEO of the combined company while Transatlantic CEO Robert Orlich would retire.Shareholders of Transatlantic will receive 0.88 of Allied World shares for each common share of Transatlantic. That values Transatlantic shares at about $51.10 apiece, for a transaction value of nearly $3.2 billion, based on the more than 62 million shares outstanding that the company reported in late April. The combined company would be called TransAllied Group Holdings AG.A month after the deal was announced, Validus Holdings Inc made an unsolicited buyout offer for Transatlantic.Under the Bermuda-based insurer’s offer, Transatlantic stockholders would receive 1.5564 Validus common shares and $8 in cash for each share of Transatlantic common stock they own. Validus said the offer is worth $55.95 per Transatlantic share, a 27 percent premium to the price before the Allied deal was announcedDuring a conference call to discuss its second-quarter results on Thursday, Mr Orlich, said the Validus offer also presents “significant uncertainty” with respect to Transatlantic’s ratings and raises questions about whether it will be completed.Transatlantic maintained Transatlantic maintained in a statement that it offered to share detailed information about its operations and financial standing with Validus prior to discussing its offer, but the company would not agree to sign a confidentiality agreement with a standstill provision, which would have halted its exchanged offer. Orlich said because the company would not agree to the needed documents, Transatlantic is unable to review and analyse its offer properly.“The confidentiality agreement that we ask Validus to sign contains substantially the same terms and conditions that Allied World agreed to, including the standstill, and we believe it is reasonable and appropriate,” Mr Orlich said. “In contrast, Validus sent to us a draft confidentiality agreement without a standstill and that would have allowed Validus to use and publicly disclose Transatlantic’s confidential information for its own purposes.”Transatlantic shares closed down 28 cents at $51.50 on Thursday.Validus countered Transatlantic’s comments with its own statement that charged the standstill agreement “is nothing more than a poorly disguised attempt to prevent us from bringing our superior proposal to Transatlantic stockholders.” It urged shareholders to reject the Allied World deal and tender their shares with Validus.Validus Holdings shares slipped 21 cents to close at $27.07.Allied World issued a statement late in the trading day that said the combination is on target to close. “With integration planning well under way, the regulatory process advancing and having received favourable reactions from the ratings agencies as to TransAllied’s combined financial strength, we look forward to completing our merger of equals as early as possible,” the company said.Allied World shares gained 51 cents to close at $55.63.