Validus begins exchange offer for IPC despite deal with Max Capital

By Lisa Kerner

Charlotte, N.C., May 12 - Validus Holdings, Ltd. began an exchange offer on Tuesday for all of the outstanding common shares of IPC Holdings, Ltd.

According to Validus, the offer gives IPC shareholders 1.2037 Validus common shares for each IPC common share held.

The exchange offer will end at 5 p.m. ET on June 26 unless extended.

IPC and Max Capital Group, Ltd. 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.

"The agreement between IPC and Max precludes IPC from engaging in discussions with Validus, which has left us with no choice but to take our offer directly to IPC shareholders," Validus chairman and chief executive officer Ed Noonan said in a company news release.

On May 1, IPC's board of directors unanimously reaffirmed its belief that Validus' acquisition proposal is not superior to IPC's proposed combination with Max. IPC shareholders were urged not to tender their shares in the proposed Validus exchange offer.

Validus' plan for IPC

As previously reported, Validus has a three-part plan to acquire IPC that includes:

• Soliciting IPC shareholders to vote against the proposed Max amalgamation;

• Beginning an exchange offer for all IPC common shares; and

• Pursuing a scheme of arrangement under Bermuda law.

"We believe IPC shareholders deserve the right to choose our superior offer over the Max transaction and our three-part plan gives them that opportunity," Noonan said.

Validus also said on Tuesday that it is filing preliminary proxy materials with the Securities and Exchange Commission in connection with its plan to pursue a scheme of arrangement under Bermuda law.

The company has already filed a definitive proxy statement with the SEC in connection with the IPC annual general meeting of shareholders urging IPC shareholders to vote against the proposed Max amalgamation.

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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