Berkshire Hathaway to acquire Alleghany for $11.6 billion
Andrew Bary of Barron's thinks a bidding war for Alleghany could soon erupt, naming Markel among others as potential suitors. The fact that there is no break-up fee effectively gives Alleghany a free put option at $848.02 while they "go shop". It is unusual that Buffett did not put a break-up fee into the deal. https://www.barrons.com/articles/watch-out-warren-buffett-a-bidding-war-for-insurer-alleghany-could-erupt-51648222639
This is an interesting article by Barron's Andrew Bary delving into the $848.02 number (it is $850 less the GS advisory fee which Buffett insisted he wasn't paying for). Also there is some discontent that Berkshire is getting too good of a deal, although the article does point out that the premium to book is significantly greater than where $Y stock has traded in recent years. While there is a 25-day "go shop" period, there is also no breakup fee should $Y find a higher bidder. This is like Buffett providing Alleghany with a free option while they go and shop the company to higher bidders. Usually Buffett would insist on a break-up fee. Not this time. https://www.barrons.com/articles/warren-buffett-berkshire-hathaway-alleghany-51647960243
Great analysis and very well written. The early March Alleghany share purchases by Joe Brandon might raise a few eyebrows but that can be cleared up easy enough once we find out when the negotiations with Berkshire transpired. I hope the acquisition goes through and Buffett and Ajit start working their compounding magic.