By Lisa Kerner
Charlotte, N.C., May 4 - Max Capital Group, Ltd. reiterated its belief that Validus Holdings, Ltd.'s planned hostile stock exchange offer for IPC Holdings, Ltd. is intended to distract attention from the superior value Max is delivering to IPC's shareholders.
"Max and IPC have a deal - an executed agreement that delivers more certainty as well as more value both today and into the future," Max chairman and chief executive officer W. Marston (Marty) Becker said in a company news release.
"In contrast, Validus continues to promote illusory concepts to IPC shareholders, each with many unknowns, uncertainties and caveats," Becker said.
Becker called Validus' proposed transaction "flawed from an IPC point of view" because it "requires accepting a proposal rejected by the IPC board with a below book-value price, paid for with the stock of a largely correlated, unproven property cat platform that underwrites volatile, short-tail lines."
Validus has retained Dowling & Partners Research or an affiliate to provide paid advisory services in connection with its hostile efforts, according to Max.
Dowling agreed to assist Validus in the preparation of communication materials and to arrange meetings for Validus with the intent of soliciting from IPC shareholders votes against Max's proposed merger with IPC, Max said.
Becker said Dowling's agreeing to help Validus seems inconsistent with the company's reputation "as a well-regarded independent research and reporting firm in the insurance industry."
IPC committed to Max
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.
The board recommended that IPC shareholders not tender their shares in the proposed Validus exchange offer, if and when it is made, it was previously reported.
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 announced its three-part plan to acquire IPC that it said gives IPC shareholders 1.2037 Validus common shares per IPC share and 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 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.
It was previously noted that 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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