Validus has three-part plan to acquire IPC; deal could close in June

By Lisa Kerner

Charlotte, N.C., April 30 - Validus Holdings, Inc. announced its three-part plan to acquire IPC Holdings, Ltd. that 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.

Validus said the three-part plan includes:

• Soliciting IPC shareholders to vote against the proposed Max Capital Group Ltd. 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.

"The fact that IPC's board has agreed to an extraordinarily restrictive agreement with Max, that precludes IPC from engaging in discussions with Validus, 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.

"We believe that what IPC shareholders get out of the proposed Max transaction is a bad deal - a transaction in which IPC under the guise of 'diversification' would combine with an unprofitable company that itself recognizes the need to reduce its portfolio of high-risk alternative investments," Noonan said.

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.

As previously reported, 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.

If the termination fee is eliminated or reduced as a result of the lawsuit, Validus wants the amount by which it is reduced to be paid to IPC shareholders as a dividend.

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.

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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