Shareholders of Bermuda-based insurer IPC Holdings voted down a tie-up with Max Capital Group on Friday, Max said.
The deal between IPC and Max, also Bermuda-based, had the approval of the boards of both companies.
IPC shareholders may have voted against the deal in favor of a rival offer from Validus Holdings. Validus has been working for weeks to thwart the IPC-Max deal.
Max said that in view of the shareholder vote, it was dropping the merger agreement. “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,” Max Chief Executive Marston Becker said in a statement.
“We believed and continue to believe that the combination of Max and IPC would have created significant value for both companies’ shareholders,” he added.
IPC shares were down 3 cents at $27.42 in midday trade, while Max was off 28 cents, or 2.7 percent, at $17.05, both on the Nasdaq stock market.
(Reporting by Lilla Zuill; editing by John Wallace)
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