Alleghany fails to get better offer to block $11.6bn Berkshire buyout

The 25-day “go-shop” period in which the  Alleghany Corporation was seeking alternative acquisition offers expired on April 14 without securing more attractive bids than the one made by Warren Buffett’s  Berkshire Hathaway. The company spoke to 31 potential buyers, but didn't receive any offers.

Buffett’s Berkshire has offered $11.6 billion to acquire Alleghany, including its global reinsurer TransRe, wholesale specialty insurers RSUI, and CapSpecialty, an underwriter of specialty casualty and surety insurance.

The two companies jointly announced last month that they have entered into a definitive agreement under which Berkshire Hathaway will acquire all outstanding Alleghany shares for $848.02 per share in cash.

Under the terms of the agreement, Alleghany and its representatives were permitted to solicit and consider alternative acquisition proposals from third parties until April 14.

During the go-shop period, Alleghany and its financial advisor solicited alternative acquisition proposals from 31 potentially interested third parties, but didn't receive any offers.

"Despite these efforts, Alleghany did not receive any alternative acquisition proposals," the company said in a statement.

Following the expiration of the "go-shop", Alleghany became bound by customary "no-shop" restrictions under the definitive merger agreement that limit its and its representatives' ability to initiate, solicit or engage in discussions or negotiations regarding alternative acquisition proposals from third parties, except as otherwise permitted by the agreement, subject to compliance by Alleghany's Board of Directors with its fiduciary duties. There is no termination fee payable in the event of any termination of the merger agreement.

The transaction is expected to close in the fourth quarter of 2022, subject to customary closing conditions, including approval by Alleghany stockholders and receipt of regulatory approvals.

Goldman, Sachs & Co. LLC is serving as financial advisor and Willkie Farr & Gallagher LLP is serving as legal advisor to Alleghany.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.