Flagstone Reinsurance makes cash and stock bid to buy IPC Holdings

By Lisa Kerner

Charlotte, N.C., July 1 - Flagstone Reinsurance Holdings Ltd. offered to buy IPC Holdings Ltd. in a cash-and-stock offer valued at $33.62 per IPC share or approximately $1.88 billion, Flagstone announced on Wednesday.

IPC shareholders would receive 2.638 of new Flagstone common shares for each IPC common share plus $5.50 per share in cash, a Flagstone news release said.

There is already an active offer for the company but it has been contentious. Validus Holdings, Ltd. is seeking to acquire IPC for $3.75 in cash and 1.1234 Validus voting common shares for each IPC common share in an exchange offer now slated to end at 5 p.m. on July 6.

"Our offer contains a materially greater cash component and offers a greater overall value to IPC shareholders," said Flagstone chairman Mark Byrne.

"Our offer is not subject to financing and is made on a friendly basis, with a plan to work with the existing board and management of IPC to preserve the business and franchise value of IPC in the combined entity," Byrne said.

IPC said on Wednesday it will set a date for a special meeting after consulting with its advisors after Validus delivered sufficient requisitions from IPC shareholders to hold such a meeting under Bermuda law.

Validus said at the special meeting it would propose replacing IPC's board, eliminating or amending some provisions in IPC's bylaws and binding IPC to its scheme of arrangement.

All three reinsurance companies are based in Bermuda.

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