Transatlantic Holdings chief executive Bob Orlich has written to clients and brokers to reassure them as attempts to take the company over continue.
Three companies - Allied World, Validus and National Indemnity - are in the running to buy Transatlantic. National Indemnity, owned by Warren Buffett's Berkshire Hathaway, was the latest to throw its hat into the ring, with a $3.25bn bid.
Orlich's letter, titled 'Nothing Without You', noted that much of the company's attention has been focused on shareholders as the bidding continues, but aimed to convey a sense of business as usual. "These are not perfect circumstances in which we find ourselves. However we have faced uncertainty before, and business, like life, must go on," Orlich wrote. "Our teams around the world remain the same expert professionals you have relied on, and we hope that you will continue to do so."
Orlich also reassured clients and brokers that the picture about Transatlantic's future would soon become clearer. "We do expect to have greater clarity by conference season, and well before our major renewal season," he wrote. "We will continue to update you with major developments, and please do not hesitate to contact me to discuss any element of the changes taking place."
Despite the shareholder focus, Orlich stressed that the events unfolding were being driven by the strength of Transatlantic's relationhsip with clients. "We have created our global network of offices to deliver world class solutions to your local risk transfer needs," Orlich wrote. "Our stockholders will have that strength in mind when they decide on the future path of our company."
The letter also pointed out that the company had faced upheaval during its separation from former majority shareholder American International Group, and called on clients and brokers to offer the same support that they had back then. "We are your risk transfer partners. We cannot tell what the future will bring — that is why our industry exists," the letter said. "All we can do is earn your support through our hard work and professional approach."
Transatlantic has indicated it is open to further talks with National Indemnity, but talks with Validus failed to get off the ground because of Transatlantic's insistence on a standstill agreement. Transatlantic argues the agreement is necessary to safeguard confidential information about the company, while Validus contends that such an agreement would bar it from later pursuing a hostile bid for Transatlantic in the event that it needed to.
Validus is currently aiming to take its offer directly to Transatlantic shareholders, bypassing the board, but has urged Transatlantic's board to engage in discussions.
Transatlantic insists that neither Validus's nor National Indemnity's offer are superior to the merger agreement it struck with Allied World in June, despite their higher face value.
Transatlantic's book value a share at 30 June 2011 was $67.76. Allied World's bid valued Transatlantic at $44.22 a share on 5 August, Validus's $46.37 and National Indemnity's $52.