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Enstar is fourth Transatlantic bidder: source
October 11, 2011 / 12:30 PM / 6 years ago

Enstar is fourth Transatlantic bidder: source

(Reuters) - Bermuda-based reinsurer Transatlantic Holdings Inc TRH.N, which has been at the center of a months-long buyout battle, said it entered talks and signed a confidentiality agreement with a fourth, unnamed, suitor.

A person familiar with the situation confirmed that the bidder is Bermuda-based Enstar Group (ESGR.O), which buys insurers that are no longer writing new business. Insurers in “run-off” only manage existing policies, collecting premiums and paying claims.

Industry trade website Insurance Insider had previously reported that Enstar was bidding with the backing of one of its largest shareholders, hedge fund manager J. Christopher Flowers.

Earlier this year, Enstar raised capital by selling nearly a 20 percent economic interest in itself to Goldman Sachs’ (GS.N) private equity arm GS Capital Partners. Goldman is also the financial adviser to Transatlantic in its sale process.

Transatlantic is already in discussions with Validus Holdings Ltd (VR.N), Berkshire Hathaway (BRKa.N) unit National Indemnity Co and an additional undisclosed party.

Last month, Reuters reported that a former Berkshire insurance executive, Joseph Brandon, was working with Morgan Stanley (MS.N) on a possible bid for Transatlantic and was the undisclosed party in question.

Transatlantic had a merger agreement with its peer Allied World, which was struck in June, but both sides called off the deal in September amid overwhelming opposition.

Validus, which has been interested in Transatlantic for years, launched a hostile bid in July but agreed to a limited standstill while in talks with the company.

Transatlantic shares rose 1.6 percent to close at $50.90, near their highest level in two months.

Reporting by Jochelle Mendonca in Bangalore and Ben Berkowitz in New York; Editing by Ian Geoghegan, Dave Zimmerman, Phil Berlowitz, Gary Hill

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