Property catastrophe reinsurance provider IPC Holdings, Ltd. (IPCR) announced Tuesday that it has mailed a letter to its shareholders to highlight the important value creation opportunities and strategic benefits of IPC's merger with Max Capital Group Ltd. (MXGL) and to elucidate some of the deceptive public statements made recently by Validus Holdings Ltd. (VR).
IPC said that that the combination of IPC and Max would be complementary and help in diversification, enable excess capital to be deployed in new businesses, offer favorable pricing and underwriting developments, increased scale of operations with about $3 billion of capital.
The company stated that the Validus proposal is at a significant discount to IPC's book value, offering less book value per share than the IPC/Max transaction. Validus filed five proxy statements in last two months, regarding its proposals.
IPC said that on March 31 it received an unsolicited acquisition proposal from Validus for a price below book value, following which the board unanimously turned down the proposal stating that it did not constitute a superior proposal and not in the best interests of IPC and its shareholders for a several of reasons.
On May 18, IPC received a revised unsolicited proposal from Validus, which was also unanimously rejected, stating that it was at a 13% discount to IPC's book value per share as of May 29, 2009 and would result in a combined company carrying a highly correlated risk concentration.
IPC said that the timing of any combination with Validus was uncertain and remote, extending well beyond the inception of hurricane season in June, thereby substantially increasing the execution risk inherent in any Validus offer.
Apart from other reasons for rejection, the company also mentioned that the proposal would reduce IPC shareholders' participation in a combined company and that it contained uncertain realizable value.
IPC noted that unlike Validus, the company believed the ratings of the combined company are an important factor for the IPC Board to consider in any transaction because ratings impact the combined company's ability to attract and retain high-quality insurance and reinsurance business. As a result, receipt of satisfactory ratings on the new combined company is an important consideration in any merger decision, the company said.
IPC said that the company and Max held joint meetings with each of the rating agencies regarding their planned amalgamation and received satisfactory indicative ratings for the combined business from the agencies.
Further IPC added that Validus's stated objective in the exchange offer is to get legal ownership of IPC's shares, but IPC's bye-laws preclude any shareholder from becoming the registered owner of or beneficial ownership of 10% or more of IPC's shares.
IPC said that Validus previously announced its intention to use a scheme of arrangement under Bermuda law to achieve this acquisition, which did not constitute a superior proposal and was not in the best interests of IPC and its shareholders. The Supreme Court of Bermuda, stating that it was no more than purely speculative, dismissed the proposal.
Kenneth Hammond, Chairman of IPC, said, "With all regulatory approvals in hand, we are well on our way to completing this transaction immediately after our June 12 meeting and delivering enhanced value for our shareholders. We urge IPC shareholders to vote the white proxy card for all the proposals associated with the merger."
Validus ended Tuesday's regular trading session at $24.55, up $1.02 or 4.33%.
IPC closed Tuesday's regular trading session at $26.73, up $1.00 or 3.89%. In after-hours, the stock lost $1.15 or 4.29%.
Max Capital finished Tuesday's regular trading session at $17.13, up 70 cents or 4.26%.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.