Alterra Capital Holdings Ltd (NASDAQ:ALTE) Investor Files Lawsuit Against Takeover By Markel Corporation

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Company Name(s): 
Alterra Capital Holdings
Case Name: 
Alterra Capital Holdings Deal Case 02/08/2013
Case Status: 
Lawsuit Filed
Affected Securities
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 

Feb. 11, 2013 (Shareholders Foundation) -- An investor in shares of Alterra Capital Holdings Ltd (NASDAQ:ALTE) filed a lawsuit in effort to stop the proposed takeover of Alterra Capital Holdings by Markel Corporation at a value of approximately $29.75 per NASDAQ:ALTE share.

The plaintiff alleges that the defendants breached their fiduciary duties owed NASDAQ:ALTE stockholders by agreeing to sell the company too cheaply via an unfair process.

On December 19, 2012, Markel Corporation (NYSE: MKL) and Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) announced that their respective boards of directors have each approved a definitive merger agreement. Based on Markel’s closing price of $459.30 as of January 16, 2013, the deal values Alterra Capital Holdings Ltd at about $29.75per NASDAQ:ALTE share.

However, the plaintiff alleges that the offer is too low and undervalues the company. Indeed, at least one analyst has set the High Target price for NASDAQ:ALTE shares at $31.00 per share. Furthermore, Alterra Capital Holdings’ financial performance improved lately. For instance, it reported that its annual Revenue rose from $746.99 million in 2008 to over $16.2 billion in 2011 and its Net Loss of $175.32 million in 2008 turned into a Net Income of $65.28 million in 2011.In addition, shares of Alterra Capital Holdings Ltd (NASDAQ:ALTE) grew from $17.50 in August 2010 to $24.48 in October 2012.

Furthermore, so the plaintiff, the process is unfair as well. The plaintiff says that the sales process discourages other potential suitors.