Validus Says It Will Continue Fight To Take Over IPC

NU Online News Service, April 9, 2:14 p.m. EDT

Hamilton, Bermuda-based insurer Validus Holdings Ltd. vowed it would fight to take over IPC Holdings Ltd. after the company's board said yesterday that it thought merging with Max Capital Group Ltd. was a better deal.

Validus Chairman and Chief Executive Officer Ed Noonan said in a statement yesterday he was "extremely disappointed" with IPC's decision, saying his company believes its proposal is superior to Max's offer.

"We remain fully committed to our proposal and expect to use all available means to complete our transaction," said Mr. Noonan. "We encourage IPC shareholders to express their support for our proposal."

The Max and IPC deal is valued at $900 million and would give IPC shareholders majority interest while Validus offer is valued at $1.68 billion, but IPC shareholders would be minority owners.

Validus released a letter yesterday addressed to Kenneth L. Hammond, IPC's chairman, and the board, saying that Validus plans to actively work against the deal by directly contacting IPC shareholders and urging them to vote against the amalgamation agreement (a share for share deal under Bermuda law).

Validus said in the letter that it also plans to file a suit, as a shareholder of IPC, to reduce the $50 million penalty Max would receive under termination of the agreement, saying it is illegal under Bermuda law.

All three companies are based in Bermuda.

Both Max and Validus say their offers would provide IPC with business diversification benefits. A combination with Max would bring liability business into the mix, while Validus deals in short-tailed business from Validus Lloyd's operation, Talbot.

An SEC filing says the IPC and Max agreement can be terminated under certain conditions, one of which would be a change in the recommendation by one party's board to its shareholders.