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Allied World “go-shop” period expires with no offers

19th January 2017 - Author: Steve Evans

The “go shop” period for specialty insurance, reinsurance and investments player Allied World Assurance Company Holdings, AG, under the terms of its planned merger with Canadian property & casualty insurance and reinsurance group Fairfax Financial Holdings Limited has not resulted in any offers.

Fairfax is set to acquire Allied World in a $4.9 billion deal that saw the pair enter into a definitive merger agreement. As part of the agreement Allied World was entitled to solicit and engage in negotiations with any other firms that had alternative acquisition proposals up to the 18th January 2017.

That date has now passed and despite having actively solicited “31 potentially interested parties” Allied World has not had any other offers.

“None of these parties executed a confidentiality agreement or otherwise expressed interest in pursuing a transaction, and no other party proposed an alternative transaction,” Allied World explained in a statement.

That may seem a little surprising, as the pressure remains on insurance and reinsurance firms to gain scale, making mergers and acquisitions an attractive proposition. However, agreements can be restrictive and in this case the terms that would enable someone else to come in and acquire Allied World are likely too onerous.

This M&A deal should be completed in the second quarter of 2017, once all approvals have been received.

 

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