VALIDUS OFFERS TO BUY IPC IN $1.68BN SHARE SWAP

Bermudian insurer/reinsurer Validus Holdings Ltd has offered to acquire Bermudian reinsurer IPC Holdings in a share swap valued at $1.68bn. Under Validus’ binding offer, IPC shareholders would receive 1.2037 Validus share for each IPC share, which values IPC stock at around $29.98 per share, or 18% higher than its Monday closing. Validus made the offer weeks after IPC offered to acquire insurer/reinsurer Max Capital Group in a share swap valued at $912m. Under that proposal, IPC shareholders would own 59% of the merged group, which would nevertheless carry the Max Capital name. “This proposal represents a compelling strategic combination that we believe would generate superior value for both Validus and IPC shareholders”, said Validus boss Ed Noonan. “The shareholders of both companies would benefit from being part of a larger, more diversified, global business, which would be a market-leading carrier in Bermuda’s short-tail reinsurance and insurance market”. Validus asked IPC to respond to the offer by April 15. IPC has acknowledged receipt of the Validus offer but said that it would offer no further comment until its board has reviewed it. Max Capital chairman and chief executive Marty Becker said that the Validus offer to combine “two short-tailed property catastrophe oriented companies would appear to do little for true shareholder diversification”.