IPC Holdings deal with Max Capital supported by proxy advisory firms

By Lisa Kerner

Charlotte, N.C., June 2 - Glass, Lewis & Co. and Proxy Governance, Inc. each recommended that IPC Holdings, Ltd. shareholders vote for all the proposals in connection with the company's proposed merger with Max Capital Group Ltd.

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

IPC and Max shareholders will vote on their amalgamation at separate meetings on June 12. The transaction is expected to close immediately following shareholder approval, IPC said in a news release.

Glass Lewis, according to IPC, said the proposed merger "offers compelling strategic benefits for the company and its shareholders."

"Notably, the combination with Max is expected to diversify the company's operations and earning base, thereby reducing risk and earnings volatility," the Glass Lewis report stated, said IPC.

Proxy Governance believes IPC shareholders "will be better served by supporting the proposed transaction with Max," IPC said.

Validus offer not superior

IPC chairman Kenneth L. Hammond does not believe Validus Holdings, Ltd.'s May 18 offer for IPC constitutes a superior proposal.

The Validus offer "is subject to a number of conditions, and faces substantial obstacles to completion on the terms proposed," Hammond said in the release.

Last week the Supreme Court of Bermuda ruled that IPC shareholders could approve a scheme of arrangement with Validus at a general meeting but did not order such a meeting in advance of the June 12 vote as Valdius had hoped.

Validus extended its exchange offer for IPC, valued at $30.14 per IPC share, to 5 p.m. ET on June 26.

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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