NU Online News Service, June 12, 4:04 p.m. EDT
Shareholders of IPC Holdings Ltd. have voted down a merger bid from Max Capital Group Ltd., and Max has decided to take its offer off the table rather than sweeten the deal.
The Max deal was favored by the boards of both IPC and Max over a rival deal from Validus Holdings, which was valued at more than $1.7 billion as of June 10.
Validus said 72 percent of the votes cast by IPC shareholders rejected the Max deal.
Kenneth L. Hammond, chairman of IPC, said IPC will now give consideration to the Validus deal. "We have heard the message sent by IPC shareholders regarding the Max transaction," he said.
He added, "Consistent with our fiduciary duties, the board will review all strategic alternatives to maximize shareholder value, including sale of the company, and as part of this review will give consideration to Validus."
Meanwhile, W. Marston Becker, chairman and chief executive officer of Max said, "The board, employees and shareholders of Max were excited about the deal with IPC, and we are, of course, disappointed that IPC's shareholders did not approve it."
In a letter to Max shareholders, Mr. Becker wrote, "In the end, the Max board of directors did not believe that further enhancement of our proposal would be advantageous for our shareholders. While the IPC combination would have been an attractive combination to enhance our size and scale, we wanted to ensure Max shareholders were properly rewarded for the value that Max was bringing to the transaction."
IPC, Max, and Validus have been in a battle in the media and in the courts over the rival deals. Most recently, the companies verbally sparred when Validus sweetened its deal on Monday in advance of the IPC shareholder vote (see http://www.property-casualty.com/News/2009/6/Pages/More-Verbal-Blasts-As-Validus-Max-Fight-To-The-Finish-Over-IPC.aspx).
Validus said it now expects cooperation from IPC regarding its bid. Ed Noonan, Validus' chairman and CEO stated, "I want to thank IPC shareholders for their support throughout the voting process. By rejecting the Max amalgamation by an overwhelming margin, IPC shareholders have clearly spoken. We now expect IPC's board to heed the message sent by IPC's shareholders by agreeing to Validus' pending amalgamation agreement without delay so that IPC's shareholders can receive the superior value offered by Validus promptly."
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