By Lisa Kerner
Charlotte, N.C., May 1 - IPC Holdings, Ltd.'s board of directors unanimously reaffirmed its belief that Validus Holdings, Ltd.'s acquisition proposal is not superior to IPC's proposed combination with Max Capital Group Ltd.
The board recommends that IPC shareholders not tender their shares in the proposed Validus exchange offer, if and when it is made, according to an IPC news release.
"The IPC board continues to believe that the combination with Max will result in a stronger and more diversified company with greater potential to create value for IPC shareholders," IPC chairman Kenneth L. Hammond said in the release.
According to Hammond, "Validus continues to attempt to acquire IPC at a discount to book value with a proposal that currently values IPC at approximately 82% of diluted book value."
Validus' proposed exchange offer would contain the same economic terms as those it proposed to IPC in its March 31 proposal, which IPC's board rejected, said Hammond.
The Validus exchange offer is conditioned on, among other things, IPC shareholders rejecting the Max amalgamation at the upcoming shareholder meeting and Validus and IPC receiving approvals under their credit facilities.
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 exchange offer
On Thursday, Validus announced its three-part plan to acquire IPC that it said gives IPC shareholders the benefit of Validus' March 31 offer "notwithstanding the continued lack of cooperation of the IPC board of directors."
IPC shareholders would receive 1.2037 Validus common shares per IPC share.
As previously reported, the three-part includes:
• Soliciting IPC shareholders to vote against the proposed Max amalgamation;
• Beginning an exchange offer for all IPC common shares; and
• Petitioning the Supreme Court of Bermuda to approve a scheme of arrangement under Bermuda law.
Validus believes it could close a transaction with IPC in June under the exchange offer or in mid-July through the scheme of arrangement, which has a lower shareholder approval requirement.
Lawsuit challenges fee
Validus filed suit in the Supreme Court of Bermuda against IPC, IPC Ltd. and Max challenging the $50 million termination fee and "no-talk" provision in the March 5 amended agreement and plan of amalgamation between IPC and Max.
Validus wants any amount by which the termination fee is eliminated or reduced as a result of the lawsuit to be paid to IPC shareholders as a dividend.
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.
Mentioned in this article
| IPC Holdings, Ltd.: | Nasdaq: IPCR
|
| Max Capital Group Ltd.: | Nasdaq: MXGL
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| Validus Holdings, Ltd.: | NYSE: VR
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