IPC Holdings committed to deal with Max Capital, says Validus offer not superior

By Lisa Kerner

Charlotte, N.C., April 7 - IPC Holdings, Ltd.'s board of directors unanimously reaffirmed its recommendation that IPC shareholders vote to approve the definitive amalgamation agreement between IPC and Max Capital Group Ltd., the company announced on Tuesday.

According to IPC, the proposal from Validus Holdings Ltd. does not constitute a superior proposal as defined in its March 1 agreement with Max.

"The IPC board continues to believe that the combination with Max will create a stronger and more diversified underwriting franchise with less correlated risk," IPC chairman Kenneth L. Hammond said in a news release.

"In addition, our transaction with Max has more certainty and a clearer path to close, and we expect it to close more quickly than any Validus transaction."

IPC and Max 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.

Validus offered to acquire IPC in a share-for-share exchange that values IPC shares at $29.98.

Each IPC common share would be exchanged for 1.2037 Validus common shares, according to Validus' March 31 letter to IPC's board.

IPC's board notified Validus of its determination in a Tuesday letter.

In the letter, the board said the Max offer, among other things, provides greater book value per share to IPC shareholders.

As previously reported, Validus disputed Max's calculation of IPC's book value, claiming that Max incorrectly stated that an IPC/Max combination delivers 29% more tangible book value per share to IPC.

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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