Validus makes changes to offer for IPC; offer price remains unchanged

By Lisa Kerner

Charlotte, N.C., June 22 - Validus Holdings, Ltd. said it made "a number of concessions" in a revised amalgamation proposal delivered to IPC Holdings, Ltd. based on the company's stated concerns.

According to Validus, the concessions include allowing IPC's board to perform a limited market check after the signing of an agreement with Validus, eliminating the book value termination right so that the closing will not be affected by catastrophe risk and agreeing to an enhanced severance plan for IPC employees.

The economic terms of the offer, which Validus said "provide full and fair value for IPC shares" are unchanged.

Validus offered to acquire IPC for $3.75 in cash and 1.1234 Validus voting common shares for each IPC common share for a total consideration of $27.26 per IPC share based on Validus' closing price on Monday.

Despite IPC's rejection of the original offer, Validus began an exchange offer for IPC shares on May 12. The offer ends at 5 p.m. ET on Friday.

"While we believe that reaching a consensual amalgamation transaction would be in the best interests of IPC and its shareholders, Validus remains strongly committed to acquiring IPC and will continue to pursue alternative paths to complete a transaction, including our exchange offer and previously announced scheme of arrangement," a Validus news release said.

Validus said it will proceed with its plan to replace the IPC board at a special meeting of IPC shareholders "in order to facilitate delivering the attractive economics of Validus' offer to IPC's shareholders."

As previously reported, Max Capital Group Ltd. terminated its merger agreement with IPC after a majority of IPC's shareholders voted against the deal. Max's stockholders voted in favor of an amalgamation with IPC.

Max and IPC had agreed to combine in a stock-for-stock transaction valued at approximately $912 million.

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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