Validus Offers ‘Three-Part Plan’ to Expedite Acquisition of IPC Holdings

In the latest round of the fight for control of IPC Holdings, Bermuda-based Validus Holdings outlined a three-part plan to acquire IPC, which, it said, would “allow IPC shareholders to obtain the benefit of Validus’ previously announced offer notwithstanding the continued lack of cooperation of the IPC Board of Directors.”

Validus announced on March 31, 2009, an offer to acquire each IPC common share for 1.2037 Validus common shares pursuant to an amalgamation agreement. However, the Company’s bulletin said: “Since that time, IPC’s Board has been unwilling to discuss Validus’ Amalgamation Offer with Validus.”

Validus filed a lawsuit against Max capital, IPC’s other suitor, on Tuesday [See IJ web site – https://www.insurancejournal.com/news/international/2009/04/29/100048.htm]. Max fired a back with a response that it would “vigorously defend against the legal challenge [See IJ web site –https://www.insurancejournal.com/news/international/2009/04/30/100079.htm].

Validus described its three-part plan, as involving: “(1) soliciting IPC shareholders to vote “AGAINST” the proposed Max Capital Group Ltd. (“Max”) amalgamation, (2) commencing an Exchange Offer for all IPC common shares and (3) petitioning the Supreme Court of Bermuda to approve a Scheme of Arrangement under Bermuda law.”

Validus added that its offer “would allow IPC shareholders to benefit from the superior growth prospects of a combined company that would be a leading carrier in Bermuda’s short-tail reinsurance and insurance markets, with a strong balance sheet and quality diversification in profitable business lines. Validus’ offer would provide IPC shareholders with an 18 percent premium based on the closing prices of both companies on March 30, 2009, the last day of unaffected trading prior to the announcement of the Validus Amalgamation Offer.”

Validus’ Chairman and CEO Ed Noonan also explained; “The fact that IPC’s Board has agreed to an extraordinarily restrictive agreement with Max, that precludes IPC from engaging in discussions with Validus, has left us with no choice but to take our offer directly to IPC shareholders.

“We believe IPC shareholders deserve the right to choose our superior offer over the Max transaction and our plan will give them that opportunity. We believe that what IPC shareholders get out of the proposed Max transaction is a bad deal – a transaction in which IPC under the guise of ‘diversification’ would combine with an unprofitable company that itself recognizes the need to reduce its portfolio of high-risk alternative investments. We are confident that IPC shareholders understand the superior economics and long-term value provided by Validus’ offer.”

Validus’ bulletin proceeded to outline the details of its three-part plan. They are available at: http://www.snl.com/irweblinkx/file.aspx?IID=4137531&FID=7724185.

Source: Validus Holdings – www.validusre.bm

Topics Mergers & Acquisitions