NEW YORK (AP) ? A unit of Warren Buffett's Berkshire Hathaway Inc. has bid $3.25 billion for insurer Transatlantic Holdings.
Berkshire's National Indemnity Co. is offering $52 per share in cash for Transatlantic. That tops the price the company would get in its agreement to be bought by Allied World Assurance Co.
In a letter released by Transatlantic on Sunday, National Indemnity said its offer isn't subject to due diligence or financing conditions. The company said it expects a formal response from Transatlantic no later than the close of business Monday.
If the offer is accepted, National Indemnity would want a $75 million break-up fee if the transaction did not close by the end of the year.
Transatlantic's board said it would carefully weigh the latest offer by National Indemnity and asked shareholders to wait until it has a chance to judge it before taking action. But the company also said that it reaffirmed its recommendation of the deal with Allied World Assurance, which is based in Switzerland.
Under that deal, Transatlantic and Allied World would combine in what the companies are calling a merger of equals. Shareholders of Transatlantic would receive 0.88 of an Allied World share for each share they hold of Transatlantic.
The companies say the deal, which calls for Transatlantic shareholders to receive a 58 percent stake in the combined company and for Transatlantic to name 6 of the 11 board members, will put them on better competitive footing because of the combined company's larger size.
Allied World CEO Scott Carmliani would head the combined company and Transatlantic CEO Robert Orlich would retire.
Last month, Transatlantic rejected a hostile takeover bid from fellow insurer Validus Holdings Ltd. The board also adopted a one-year stockholder rights plan, commonly called a "poison pill," a move used to avoid hostile takeovers.
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