AWAC drops Transatlantic bid
Allied World Assurance Company Holdings and Transatlantic Holdings, Inc. have terminated their merger agreement.
The announcement comes after two rival bids, one by Bermuda-based reinsurer Validus and the other by investing legend Warren Buffett's Bershire Hathaway, were launched.
Under the terms of the termination agreement, Allied World, which has substantial Bermuda operations, said it will receive a termination fee of $35 million plus $13.3 million of merger-related expenses. Transatlantic will also be obligated to pay Allied World an additional $66.7 million if within 12 months of the termination Transatlantic enters into an agreement providing for a competing transaction, or recommends or submits a competing transaction to its shareholders for adoption, or a transaction in respect of a competing transaction is consummated.
The special meeting of Allied World shareholders, which was scheduled to be held on September 20, 2011, has been cancelled.