Transatlantic Holdings Inc. (TRH) on Friday said Berkshire Hathaway Inc. (BRKA, BRKB) unit National Indemnity Co. has signed off on a confidentiality agreement that will likely heat up competition for the reinsurer.
The move is significant given Berkshire's reputation for disdain of bidding wars over companies. Transatlantic called the terms of its arrangement with National Indemnity "substantially similar" to its confidentiality agreement with another bidder, Allied World Assurance Co. (AWH), including a customary standstill provision.
The reinsurer had already agreed in June to a stock-for-stock deal currently worth about $3 billion with Allied World. As part of that merger agreement, Transatlantic had to wait three business days from its response to the offer before it could begin talks with National Indemnity.
Transatlantic on Monday said National Indemnity's offer of $52 a share was likely to lead to a "superior proposal" to its existing merger agreement with a competitor, but wasn't itself a superior proposal.
Transatlantic shares were recently off a penny at $50.12 after hours. Berkshire's B shares were up 0.4% at $71.55.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com