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Transatlantic Sued Over $3.4 Billion Deal to Sell Company to Alleghany

Transatlantic Holdings Inc. stockholders sued the reinsurer in New York over its agreement to be taken over by Alleghany Corp. (Y) for $3.4 billion in cash and stock.

Alleghany, an insurer based in New York, yesterday announced that it had agreed to buy New York-based Transatlantic Holdings, capping months of takeover interest in the company, a former American International Group Inc. (AIG) unit that helps insurance companies pool their biggest risks.

Shareholder Marilyn Clark filed the complaint against Transatlantic today in New York State Supreme Court in Manhattan, saying that the proposed acquisition came from an unfair process and undervalues the company.

“This deep discount to the company’s book value is not a surprise given the company’s management’s refusal to undertake a full, fair and truthful sales process,” Clark said in the complaint. “The inadequate process has led to the proposed acquisition which fails to maximize the company’s value.”

A spokesman for Transatlantic declined to immediately comment on the lawsuit.

Clark seeks to have the transaction declared unlawful and unenforceable and to have the agreement rescinded.

The case is Clark v. Transatlantic Holdings Inc. (TRH), 653256/2011, New York State Supreme Court (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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