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8-K - FORM 8-K - Allied World Assurance Co Holdings, AG | y92604e8vk.htm |
Exhibit 99.1
ISS RECOMMENDS ALLIED WORLD SHAREHOLDERS VOTE IN FAVOR OF
MERGER WITH TRANSATLANTIC
MERGER WITH TRANSATLANTIC
Says Approval of Merger Agreement Warrants Support
Transaction on Target to Close in the Fourth Quarter
Zug, Switzerland September 12, 2011 Allied World Assurance Company Holdings, AG (NYSE: AWH)
today announced that Institutional Shareholder Services (ISS), a leading independent proxy advisory
service, has issued a report recommending that shareholders of Allied World vote in favor of all of
the proposals associated with the merger with Transatlantic Holdings, Inc. (NYSE: TRH). In the
report, ISS noted that the current exchange ratio is an attractive valuation for Allied World and
approval of the merger agreement between the company and Transatlantic warrants support.
We firmly believe that our merger-of-equals with Transatlantic will provide the most compelling
strategic and financial benefits to shareholders of both companies, said Scott Carmilani,
Chairman, President and Chief Executive Officer of Allied World. We are very pleased that ISS has
recommended that our shareholders vote in favor of the merger. With synergy estimates double that
of our initial projections, integration planning well underway and a clear path to closing the
transaction ahead of schedule and as early in the fourth quarter as possible, we believe the merger
will result in significant value creation for shareholders of both companies.
Allied World also stated that it was disappointed with ISS separate recommendation to
Transatlantics shareholders to not support the merger. ISS recognizes the certainty and value of
the Allied World and Transatlantic merger. However, by recommending a vote against the merger,
Allied World believes ISS is asking Transatlantics shareholders to take the risk that a higher
offer for Transatlantic will not emerge if the merger with Allied World is defeated.
Contrary to ISS recommendation to Transatlantics shareholders, Allied World believes there are
significant strategic and financial benefits to Transatlantics shareholders from the TransAllied
merger including:
Significant revenue synergies of over $160 million Allied World and Transatlantic estimate an
annual run rate of over $160 million in merger-related synergies, double what was originally
announced. This estimate excludes revenue synergies and any potential
upside from the utilization of excess capital. This increased level of synergies represents an
estimated capitalized value of $12.04 per pro forma share of TransAllied, an increase
of $6.02 per
pro forma share from what was originally contemplated when the merger agreement was announced. It
also represents an estimated capitalized value of approximately $10.58 per share to Transatlantics
shareholders, an increase of $5.29 per share from the original projection. These estimates were
calculated based on a 7.0x price to earnings multiple.
Scale and market position in the top quartile of industry The combined company will benefit from
a strengthened industry leadership position, which further helps support future growth and enhances
revenue opportunities. It will also benefit from greater scale and a truly global footprint with
local presence in key markets around the world. From a capital standpoint, the combined company
will have nearly double Allied Worlds capital base, further enhancing the combined companys
overall financial strength rating.
Strategic benefits that meet all of Transatlantics stated criteria for a merger partner As
Transatlantic has noted, a merger with Allied World is the only transaction that meets
Transatlantics current strategic initiatives for long-term value creation. Allied World is
uniquely positioned to meet all of Transatlantics stated strategic criteria for a merger. Allied
World maintains a Swiss holding company structure coupled with Irish and Bermuda operations that
provide a cost effective way for Transatlantic to compete globally. Additionally, Allied World has
a demonstrated track record in the U.S. specialty casualty marketplace where it has enjoyed
peer-leading returns on equity and growth in book value since its IPO.
Mr. Carmilani continued, We urge shareholders of both companies to vote for the TransAllied merger
and the long-term value and benefits it will provide. We remain firmly committed to the current
terms of our merger agreement and look forward to closing the transaction as early as possible in
the fourth quarter and realizing the unique and significant synergies and growth opportunities of
the transaction.
Allied World asks shareholders to vote for the proposals associated with the TransAllied merger
agreement by signing, dating and returning their WHITE proxy card promptly.
Shareholders should contact MacKenzie Partners, Inc., who is assisting Allied World with the proxy
solicitation, at (800) 322-2885 for copies of the proxy materials or questions concerning the
merger.
About Allied World
Allied World Assurance Company Holdings, AG, through its subsidiaries, is a global provider of
innovative property, casualty and specialty insurance and reinsurance
solutions, offering superior client service through a global network of offices and branches. All
of Allied Worlds rated insurance and reinsurance subsidiaries are rated A
by A.M. Best Company, A
by Standard & Poors, and A2 by Moodys, and our Lloyds Syndicate 2232 is rated A+ by Standard &
Poors and Fitch. Please visit www.awac.com for further information on Allied World.
Additional Information About the Proposed Merger and Where to Find It
This communication relates to a proposed merger between Allied World and Transatlantic. In
connection with the proposed merger, Allied World has filed with the U.S. Securities and Exchange
Commission (the SEC), and the SEC declared effective on August 18, 2011, a registration statement
on Form S-4 that includes a joint proxy statement/prospectus that provides details of the proposed
merger and the attendant benefits and risks. This communication is not a substitute for the joint
proxy statement/prospectus or any other document that Allied World or Transatlantic may file with
the SEC or send to their shareholders in connection with the proposed merger. Investors and
security holders are urged to read the joint proxy statement/prospectus, and all other relevant
documents filed with the SEC or sent to shareholders as they become available because they will
contain important information about the proposed merger. All documents, when filed, will be
available free of charge at the SECs website (www.sec.gov). You may also obtain these documents by
contacting Allied Worlds Corporate Secretary, attn.: Wesley D. Dupont, at Allied World Assurance
Company Holdings, AG, Lindenstrasse 8, 6340 Baar, Zug, Switzerland, or via e-mail at
secretary@awac.com; or by contacting Transatlantics Investor Relations department at Transatlantic
Holdings, Inc., 80 Pine Street, New York, New York 10005, or via e-mail at
investor_relations@transre.com. This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of any vote or approval.
Participants in the Solicitation
Allied World, Transatlantic and their respective directors and executive officers may be deemed to
be participants in any solicitation of proxies in connection with the proposed merger. Information
about Allied Worlds directors and executive officers is available in Allied Worlds proxy
statement dated March 17, 2011 for its 2011 Annual Meeting of Shareholders. Information about
Transatlantics directors and executive officers is available in Transatlantics proxy statement
dated April 8, 2011 for its 2011 Annual Meeting of Shareholders. Other information regarding the
participants in the proxy solicitation and a description of their direct and indirect interests, by
security holdings or otherwise, is contained in the joint proxy statement/prospectus and may be
contained in other relevant materials to be filed with the SEC regarding the merger when they
become available. Investors should read the joint proxy statement/prospectus carefully before
making any voting or investment decisions.
Cautionary Statement Regarding Forward-Looking Statements
Any forward-looking statements made in this communication reflect Allied Worlds current views with
respect to future events and financial performance and are made
pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks
and uncertainties, which may cause actual results to differ materially from those set forth in
these statements. For example, these forward-looking statements could be affected by the occurrence
of any event, change or other circumstances that could give rise to the termination of the merger
agreement; the inability to obtain Allied Worlds or Transatlantics shareholder approval or the
failure to satisfy other conditions to completion of the merger, including receipt of regulatory
approvals; risks that the proposed transaction disrupts each companys current plans and
operations; the ability to retain key personnel; the ability to recognize the benefits of the
merger; the amount of the costs, fees, expenses and charges related to the merger; pricing and
policy term trends; increased competition; the impact of acts of terrorism and acts of war; greater
frequency or severity of unpredictable catastrophic events; negative rating agency actions; the
adequacy of Allied Worlds loss reserves; Allied World or its non-U.S. subsidiaries becoming
subject to significant income taxes in the United States or elsewhere; changes in regulations or
tax laws; changes in the availability, cost or quality of reinsurance or retrocessional coverage;
adverse general economic conditions; and judicial, legislative, political and other governmental
developments, as well as managements response to these factors, and other factors identified in
Allied Worlds filings with the SEC. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on which they are made. Allied World is
under no obligation (and expressly disclaims any such obligation) to update or revise any
forward-looking statement that may be made from time to time, whether as a result of new
information, future developments or otherwise.
Contacts
Media:
Faye Cook
VP, Marketing & Communications
1-441-278-5406
faye.cook@awac.com
Faye Cook
VP, Marketing & Communications
1-441-278-5406
faye.cook@awac.com
Mike Pascale/Allyson Morris
The Abernathy MacGregor Group
1-212-371-5999
mmp@abmac.com/afm@abmac.com
The Abernathy MacGregor Group
1-212-371-5999
mmp@abmac.com/afm@abmac.com
Investors:
Keith J. Lennox
Investor Relations Officer
1-646-794-0750
keith.lennox@awac.com
Keith J. Lennox
Investor Relations Officer
1-646-794-0750
keith.lennox@awac.com