Transatlantic Holdings' board of directors has rejected the merger proposal from Validus Holdings and affirmed its commitment to its Allied World agreement.

But the board also said it is willing to “engage in discussions and exchange information” with Validus in the hope that a better proposal will be offered.

Transatlantic’s board said it had rejected the Bermuda-based (re)insurer’s original offer, which Validus described as a “superior proposal”. However, Transatlantic also believes it is ”reasonably likely” that a genuinely “superior proposal” will be made through further discussions.

Under the current Validus offer, Transatlantic shareholders would receive 1.5564 Validus shares and a special pre-closing dividend of $8 in cash.

Under the Allied World offer, shareholders would receive 0.88 Allied World shares for each of their Transatlantic shares.