IPC may attract more bids; NOVA awaits last deal OK; conditions likely on Ticketmaster buyout

By Cristal Cody

Tupelo, Miss., June 12 - Max Capital Group Ltd. canceled its deal with IPC Holdings, Ltd. after shareholders of the Bermuda reinsurer rejected the stock amalgamation on Friday.

While Validus Holdings, Ltd. plans to push ahead with its bid for IPC, a transaction will take some time to complete, an analyst said in an interview Friday.

In other transactions, NOVA Chemicals Corp. told Prospect News on Friday that it only needs one more regulatory approval to close its takeover by International Petroleum Investment Co. of Abu Dhabi.

On the regulatory front, a market source said Friday that Ticketmaster Entertainment, Inc. and Live Nation, Inc. probably will be forced to divest some assets under a British competition review now underway.

Meanwhile, stocks were mixed on Friday.

The Dow Jones Industrial Average gained 28.34 points, or 0.32%, to close at 8,799.26.

The Standards & Poor's 500 index closed up 1.32 points, or 0.14%, to 946.21, while the technology-heavy Nasdaq Composite index fell by 3.57 points, or 0.19%, to 1,858.80.

Validus looks to homestretch

IPC said the majority of shareholder votes were cast against the proposal with Max Capital.

"We have heard the message sent by IPC shareholders regarding the Max transaction," Kenneth Hammond, chairman of IPC, said in a statement. "The board will review all strategic alternatives to maximize shareholder value, including [a] sale of the company, and as part of this review will give consideration to Validus."

However, if IPC enters into a deal with Validus before June 12, 2010, it must pay Max a $50 million termination fee, IPC said in an 8-K filing with the Securities and Exchange Commission later Friday.

Validus estimated in a statement that about 72% of IPC votes rebuffed the transaction with Max.

Under the $912 million stock amalgamation with Max, Max shareholders would have received 0.6429 of an IPC share for each Max share, and IPC shareholders would have received a $2.50-a-share cash dividend after the merger closed.

"By rejecting the Max amalgamation by an overwhelming margin, IPC shareholders have clearly spoken," Ed Noonan, Validus' chairman and chief executive officer, said in the statement. "We now expect IPC's board to heed the message sent by IPC's shareholders by agreeing to Validus' pending amalgamation agreement without delay."

Validus, also a Bermuda-based reinsurer, sweetened its bid for IPC on Monday to $3.75 in cash and 1.1234 shares for each IPC share for a value of $30.32 per IPC share, based on Validus' closing price on Thursday.

Validus' exchange offer for IPC shares ends June 26.

Doug Mewhirter, an analyst with RBC Capital Markets Corp., told Prospect News on Friday that IPC shareholders probably were influenced by the recommendation against the Max deal from proxy advisory firm RiskMetrics Group Inc.

"Plus, Validus did sweeten their offer at the last minute. It wasn't by much, but that may have combined to push the deal over the top," he said.

Mewhirter said a deal with Validus will take some time to complete. IPC also could attract other bidders.

"Some other companies could come in and make an offer, so Validus buying IPC is not a forgone conclusion yet," he said.

IPC shares added 30 cents, or 1.09%, to close Friday at $27.75. Shares have traded from $19.01 to $33.75 over the past year.

Max's stock jumped $1.26, or 7.19%, to close at $18.79.

Shares of Validus dropped 92 cents, or 3.89%, to $22.73.

NOVA clears reviews

Calgary, Alta.-based NOVA Chemicals said Friday that it received clearance from the Chinese Ministry of Commerce and the U.S. Committee on Foreign Investment for its $6.00-a-share acquisition by International Petroleum.

The $499.2 million deal for the plastics company is valued at $2.3 billion with the assumption of NOVA debt.

NOVA spokesman Greg Wilkinson said in an interview Friday that the last remaining regulatory hurdle is under the Investment Canada Act, which reviews foreign ownership transactions.

"We expect to close around the end of the second quarter," he said.

NOVA shareholders approved the deal in April.

Shares closed up 4 cents, or 0.68%, at $5.93 on Friday.

Review for Ticketmaster, Live Nation

A market source said Friday that some risks remain with the merger of Ticketmaster Entertainment and Live Nation because the deal is under a British regulatory review.

On Wednesday, the transaction was referred by the Office of Fair Trade in London to the Competition Commission - where only about 10% of transactions are forwarded, the market source said.

The Competition Commission is expected to "impose remedies than block the merger outright," the source said.

Beverly Hills, Calif.-based Live Nation is the world's largest concert promoter, and West Hollywood, Calif.-based Ticketmaster controls the majority of event ticketing services.

Live Nation expected to close its $400 million stock acquisition of Ticketmaster in the second half of 2009.

The transaction includes a merger termination date of Feb. 10, 2010, with a three-month extension, according to Ticketmaster's 8-K filing with the SEC in May.

The Competition Commission's full report is due by Nov. 24, but the commission also is expected to release the focus of its investigation in July and any provisional findings by October, the market source said.

The deal also is under review by the U.S. Department of Justice and regulators in Canada, Norway and Turkey.

Ticketmaster shares rose 14 cents, or 1.84%, to close Friday at $7.74, while Live Nation's stock added 16 cents, or 2.90%, to $5.67.

Mentioned in this article:

IPC Holdings, Ltd. Nasdaq: IPCR

Live Nation, Inc. NYSE: LYV

Max Capital Group Ltd. Nasdaq: MXGL

NOVA Chemicals Corp. NYSE: NCX

Ticketmaster Entertainment, Inc. Nasdaq: TKTM

Validus Holdings, Ltd. NYSE: VR

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