Validus loses in court; IPC, Max Capital merger vote set for June 12

By Lisa Kerner

Charlotte, N.C., May 29 - The Supreme Court of Bermuda decided that a scheme of arrangement with Validus Holdings, Ltd. could be approved by IPC Holdings, Ltd. shareholders acting at a general meeting and rejected IPC's contention that the court does not have jurisdiction to sanction a scheme of arrangement without approval of IPC's board, according to a Validus news release.

The court did not, however, order a meeting in advance of the vote on IPC's proposed amalgamation with Max Capital Group Ltd. as Validus had requested.

According to Validus, IPC shareholders can reject the Max amalgamation at IPC's annual meeting on June 12 in favor of a deal with Validus.

"Despite the extraordinary efforts by IPC and Max, the court's ruling supports the rights of IPC shareholders to obtain the value offered by Validus should they so desire," Validus chairman and chief executive officer Ed Noonan said in a company news release.

"Validus is pleased that, if the Max deal is voted down, it will have a clear path to pursue a scheme of arrangement," Noonan said.

If shareholder approvals are obtained at the respective meetings on June 12, Max said it would expect its merger with IPC to occur "shortly thereafter."

Max chairman and CEO W. Marston (Marty) Becker called Friday's ruling "the appropriate one."

"Validus has unsuccessfully tried almost every legal maneuver imaginable, and this decision eliminates uncertainty for shareholders of IPC and Max," Marston said in a statement.

As previously reported, IPC's board of directors unanimously reaffirmed its recommendation of IPC's proposed amalgamation with Max and said that Validus' May 18 offer does not constitute a superior proposal. The cash-and-stock offer is valued at $30.14 per share of IPC common share.

Validus extended its exchange offer for IPC's shares to 5 p.m. ET on June 26.

Max and IPC agreed to combine in a stock-for-stock transaction valued at approximately $912 million. Max shareholders will receive 0.6429 IPC shares for each Max share.

The Supreme Court of Bermuda Commercial Court decided not to grant Validus' application for an expedited trial on its litigation against IPC and Max. Validus said its lawsuit challenges the $50 million termination fee and "no-talk" provision in the IPC/Max agreement.

Based in Hamilton, Bermuda, Validus provides insurance coverage and reinsurance coverage in the property, marine and specialty lines markets.

IPC, located in Pembroke, Bermuda, provides property catastrophe reinsurance as well as aviation, property-per-risk excess and other short-tail reinsurance.

Specialty insurance and reinsurance provider Max is based in Hamilton, Bermuda.

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