Experts muddy the Transatlantic waters

01-10-2011

Roger Crombie

Experts muddy the Transatlantic waters

Independent proxy, Institutional Shareholders Services, recently provided its view on a possible Allied World-Transatlantic merger, but as Roger Crombie outlines, clarity evidently did not form part of the review.

Allied World’s protracted bid to acquire Transatlantic was withdrawn in mid-September. But a few days before, an expert and independent proxy service, Institutional Shareholder Services (ISS), issued a definitive report to Transatlantic shareholders, which said two things:

• Transatlantic’s shareholders should give their “approval of the merger agreement between (Allied World) and Transatlantic”, and that

• Transatlantic’s shareholders should “not support the merger”.

I know this because, on September 11, a news report appeared, headlined ‘Proxy Firm Opposes Allied Bid’. It said that “the proposed merger of Transatlantic Holdings and Allied World Assurance suffered another major blow late on Friday, as a major shareholder advisory firm (ISS) recommended that investors vote against the $2.86 billion deal (between Transatlantic and Allied World)”.

Aha, I thought, on reading the news story.

The very next day, Allied World put out a press release, headlined ‘ISS Recommends Allied World Shareholders Vote in Favor of Merger with Transatlantic’. It said that “a leading independent proxy advisory service (ISS) has issued a report recommending that shareholders of Allied World vote in favour of all of the proposals associated with the merger with Transatlantic Holdings”.

Er, I thought, on reading the press release.

I did not, until then, know very much about expert and independent proxy services, but now I know all I need to know. As a result, I am about to form a proxy service of my own, an expert and independent agency that will take on the difficult questions in life, for a massivefee. I have already come up with a few answers to some big questions, and as an inducement to you to visit my new firm, I shall now issue you with a few major findings, entirely for free.

For instance:

Should you chop your head off with a dull pair of kitchen scissors? Obviously, no. And yet, when you think about it, yes.

Would it be a good idea to fly cargo to Bali and live on a beach, wearing a sarong, for the rest of your life? Clearly, you should not. And, of course, you should. T

hese decisions were not made on the spur of the moment. I had to think about them for as long as it took me to type the words. I know you will appreciate the clarity we expert and independent proxy services bring to these matters.

I expect you’re thinking that I am going to explain the ISS conclusions on the Allied/Transatlantic deal and thereby tell you which way you might have cast your votes, if you had any and if you’d been asked to vote. Well, I’m not. I can’t. ISS didn’t say, so I can’t either. When the deal cratered, which way ISS was leaning suddenly became moot.

The truth is, of course, that different shareholders look for different things. Were I a Transatlantic shareholder, I would have wanted the most money with the least tax payable. Anything else would be what we in the expert and independent proxy firm business call ‘less’.

Another entirely free example, before you go on your way. How can you get into the independent proxy firm business? Easy: buy my firm. Or don’t. You may go now.

Allied World, Transatlantic, M&A, reinsurance

Bermuda Re