The Bermuda-based Max Capital Group Ltd. has released a statement indicating that it believes “that recent actions by Validus Holdings, Ltd., including its announced plan to launch a highly conditional hostile stock exchange offer for IPC Holdings, Ltd., are intended to distract attention from the superior value Max is delivering to IPC’s shareholders. The amalgamation with Max continues to provide IPC shareholders with more value and certainty of closing, while the Validus proposal -in whichever form – is both dilutive and of uncertain value to IPC shareholders.”
The bulletin characterized Validus’ three part plan [See IJ web site – https://www.insurancejournal.com/news/international/2009/05/01/100131.htm] as a “hostile strategy.” It said “Max and IPC have a straightforward, binding plan in place to complete their amalgamation, which continues to move toward an expected June closing. A transaction with Max provides IPC shareholders with superior value today and a diversified business expected to produce superior value well into the future.”
Max Capital’s Chairman and CEO W. Marston (Marty) Becker described the Max/IPC deal as an “executed agreement that delivers more certainty as well as more value both today and into the future. We remain fully committed to completing our planned merger with IPC and forming a world-class specialty insurer/reinsurer. In contrast, Validus continues to promote illusory concepts to IPC shareholders, each with many unknowns, uncertainties and caveats.
“The transaction proposed by Validus is flawed from an IPC point of view in that 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,” Becker added. “Validus is trying to deny IPC shareholders the opportunity to participate in the value creation in a combination with Max. Given the facts and the interests at stake, we remain very confident that IPC and Max shareholders will recognize the superior deal they have in hand.”
Max also took a swipe at Validus’ engagement with “Dowling & Partners Research or an affiliate to provide paid advisory services in connection with Validus’ hostile efforts.” The bulletin said: “Max believes that such a role for the boutique insurance industry reporting and research firm is incompatible with its activities as an independent capital markets analyst.”
Becker stated: “We are not surprised that Validus has reached out for additional assistance in their attempts to disrupt our deal with IPC. We are surprised that Dowling has chosen to take sides in a paid partisan advocacy role. This seems inconsistent with their reputation as a well-regarded independent research and reporting firm in the insurance industry. Even more concerning is their involvement in this activity with no public disclosure by Validus or Dowling. Max would expect that this new role for Dowling would have them cease reporting on the Max/IPC merger or the Validus hostile takeover offer.”
Source: Max Capital – www.maxcapgroup.com
Topics Mergers & Acquisitions
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