On March 6, 2012, the acquisition of Transatlantic Holdings (TRH) was completed by Alleghany Corp. (Y). On several occasions we have made specific reference to the undervalued nature of the Transatlantic Holdings. Below is a performance chart of TRH after appearing on our May 7, 2011 Dividend Watch List.
In several accounts that we manage, TRH was already a large holding. However, we couldn’t help but load up on additional shares after Alleghany Corp. announced that they put in a bid for TRH. We were glad that TRH reject the lowball bid by Warren Buffett’s Berkshire Hathaway (BRK-A).
When requested by Alleghany whether we wanted cash or shares, we took shares in the taxable accounts and cash in the tax-deferred accounts. As luck would have it, the redemptions of our TRH shares into cash/stock comes in time for our recommendation to reduce exposure to the stock market based on Dow Theory’s non-confirmation.