IPC, Max Capital combination not recommended by proxy advisory firm

By Lisa Kerner

Charlotte, N.C., June 3 - Validus Holdings, Ltd. chairman and chief executive officer Ed Noonan said the company was "gratified but not surprised" by RiskMetrics Group/ISS' recommendation that IPC Holdings, Ltd. shareholders vote against all of the proposals related to the amalgamation agreement between IPC and Max Capital Group Ltd.

Noonan, in a statement released on Wednesday, cited the "the inferior value of the Max transaction and the disregard the IPC board has shown for its shareholders and its fiduciary obligations."

As previously reported, two additional proxy advisory firms, Glass, Lewis & Co. and Proxy Governance, Inc., each recommended that IPC shareholders vote for all the proposals in connection with the IPC/Max amalgamation.

IPC and Max shareholders will vote on their amalgamation at separate meetings on June 12.

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.

Validus said that its offer would give IPC shareholders $3.00 in cash and 1.1234 Validus voting common shares for each IPC common share for a total consideration of $30.58 per IPC share based on Validus' closing price on Tuesday. The company extended its exchange offer for IPC to 5 p.m. ET on June 26.

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 Validus had hoped.

"IPC shareholders have a clear path to receiving the higher value of Validus' superior offer with or without the support of the IPC board following the rejection on June 12 of the proposed amalgamation with Max," Noonan said.

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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