Berkshire’s Bid to Take Over Transatlantic is Below Book Value

August 8, 2011

Warren Buffett’s Berkshire Hathaway is bidding on Transatlantic Holdings (TRH)  in order to top bids by two insurance companies.  Buffett’s bid would still only represent a 15% premium to Transatlantic’s current price, and would still be below Transatlantic’s book value.  From the NY Times:

Even at $3.2 billion, Berkshire’s offer is well below Transatlantic’s book value of $4.2 billion. And if it is all-cash, it would offer Transatlantic shareholders no upside if the combined company improves financially.

According to the article, Transatlantic’s board is “carefully” considering the offer, despite the offer being lower than TRH’s book value.  If you own TRH shares, Salas Wang LLC would be interested in discussing a possible case for breach of fiduciary duty against Transatlantic’s board for accepting an offer for the company below book value.

Salas Wang LLC is a law firm that represents investors, individuals, and businesses in litigation and arbitration.  This may be considered attorney advertising.  You can contact Salas Wang LLC at 312.803.4963 and visit us on the web at www.salaswang.com.  

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