Validus to Hold Modified Dutch Auction Tender for $200 Million Share Buyback

May 4, 2012

Bermuda-based Validus Holdings, Ltd. announced that its Board of Directors has approved a modified Dutch auction tender offer pursuant to which the Company may repurchase up to $200.0 million in common shares.

Validus said the “tender offer is part of the Company’s existing authorization to return up to $400.0 million to shareholders through share repurchases or other means. As of May 2, 2012, the Company has $370.7 million remaining under this authorization. The tender offer will utilize part of this remaining authorization and not be an additional amount.”

The bulletin explained that the “tender offer will proceed by way of a ‘modified Dutch auction’ pursuant to which Validus shareholders may tender all or a portion of their common shares (1) at a price of not less than $30.50 and not more than $33.50, in increments of $0.25 per share or (2) without specifying a purchase price, in which case their common shares will be purchased at the purchase price determined in accordance with the tender offer.

“When the tender offer expires, the Company will select the lowest price within the range of prices specified above (the “purchase price”) enabling the Company to purchase up to $200.0 million of its common shares. Shareholders will receive the purchase price in cash, without interest, for common shares tendered at prices equal to or less than the purchase price, subject to the conditions of the tender offer, including the provisions relating to proration, ‘odd lot’ priority and conditional tender in the event that the aggregate cost to purchase all of the common shares tendered at or less than the purchase price exceeds $200.0 million.

“These provisions will be described in the Offer to Purchase relating to the tender offer that will be distributed to shareholders. All common shares purchased by the Company will be purchased at the same price. All common shares tendered at prices higher than the purchase price will be returned promptly to shareholders.”

The bulletin also indicated that the “tender offer will not be conditional upon obtaining financing or any minimum number of common shares being tendered; however, the tender offer will be subject to a number of other terms and conditions, which will be specified in the Offer to Purchase. Dowling & Partners Securities, LLC will serve as the dealer manager for the tender and Innisfree M&A Incorporated ((877) 456-3488) will serve as information agent for the tender offer. Skadden, Arps, Slate, Meagher & Flom LLP is providing legal counsel with respect to the tender offer.

“While the Company’s Board of Directors has authorized the tender offer, it has not, nor has the Company, the dealer manager, the information agent or the depositary made any recommendation to the Company’s shareholders as to whether to tender or refrain from tendering their common shares or as to the price or prices at which they may choose to tender their common shares. Shareholders must make their own decision as to whether to tender their common shares and, if so, how many common shares to tender and the price or prices at which they will tender them. Shareholders are urged to discuss their decision with their tax advisors, financial advisors and/or brokers.”

Source: Validus Holdings

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