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April 14, 2022

Alleghany shareholder sues to block $11.6bn takeover by Berkshire Hathaway

US-based insurance firm Alleghany, which is to be acquired by Berkshire Hathaway in an $11.6bn deal, has been sued by a shareholder over a lack of disclosures, Reuters reported.

Complainant Shiva Stein has accused Alleghany that it made misleading and inadequate disclosures about the acquisition.

In a complaint to the Manhattan federal court, the plaintiff said the insurance firm did not properly explain the financial reasoning behind the “fairness opinion” issued by the bankers at Goldman Sachs, the financial advisor to Alleghany for the deal.

Without adequate disclosure, the “plaintiff will be unable to make a fully-informed decision regarding whether to vote in favour of the proposed transaction, and she is thus threatened with irreparable harm,” the complaint read.

The Alleghany shareholder wants to block Warren Buffett-backed firm’s bid to buy the insurance firm unless more disclosures are made.

Last month, Berkshire Hathaway agreed to buy all outstanding shares of Alleghany for a price of $848.02 apiece.

In Goldman Sach’s opinion, the offer price was “fair from a financial point of view” to Alleghany shareholders.

The New York-based Alleghany offers property and casualty reinsurance and insurance services through its operating subsidiaries.

Alleghany’s property and casualty subsidiaries include Transatlantic Holdings, RSUI Group, and CapSpecialty.

Upon completion, Alleghany will operate as an independent subsidiary of Berkshire Hathaway.

The deal is yet to receive clearance from regulators and is likely to close in the fourth quarter of this year.

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