It's not an enormous premium, but it does indicate that Wall Street investors think there's a good chance another buyer may outbid Buffett.
Under the terms of its agreement with Berkshire, Alleghany may "solicit, initiate, induce or encourage" alternative acquisition proposals during a 25-day "go-shop" period.
Berkshire says it is paying a 29% premium to Alleghany's average stock price over the 30 days before Monday's announcement and a 16% premium to its 52-week high closing price.
But CNBC Pro (subscription) notes that Keefe, Bruyette & Woods analyst Meyer Shields says the 1.26 price-to-book ratio is on the low end of past deals in the insurance industry.
And he says the price-to-earnings ratio is the lowest among the past eight deals in the sector.
While that could "stimulate" other bidders, he's telling clients "we think most competing (re)insurers are mostly focused on less-complicated organic growth in what remains a positive operating environment.
"Alleghany’s significant noninsurance businesses would be a difficult fit for most other (re)insurers, which also makes competing bids unlikely.”
Even so, Barron's thinks "potential" bidders include Markel, W.R. Berkley, Chubb, Loews, and investor Bill Ackman.
It quotes JMP Securities analyst Mathew Carletti as saying Berkshire is paying a "fair, but not full, price." He values Alleghany "conservatively" at $800 to $900 per share, and thinks it could be worth as much as $1,000 share, especially if a bidding war breaks out.
Buffett, however, almost certainly wouldn't be a combatant.
Even though he said in the news release that he is "particularly delighted that I will once again work together with my long-time friend, [Alleghany CEO and former CEO of Berkshire subsidiary General Re] Joe Brandon," and that "Berkshire will be the perfect permanent home for Alleghany," Buffett almost always steps away if there is a higher competing offer.