Reinsurance and insurance provider Validus Holdings Ltd. (VR) said Monday that it would seek to dislodge the board of directors of IPC Holdings Ltd. (IPCR) if it is unable to reach a merger agreement with the board in a timely fashion. Meanwhile, IPC has sent a letter outlining criteria that must be met for its board to recommend the sale to Validus.
The Hamilton, Bermuda-based company said it would continue to seek a consensual amalgamation transaction and pursue its offer of $3.75 in cash and 1.1234 Validus voting common shares for each IPC common share for a total consideration of $30.32 per IPC share based on Validus' closing price on June 11.
IPC noted that although Validus twice raised its bid, the present offer implies a value of $29.28 as of June 12, 2009, representing a 16% discount to its May 31 book value per share of about $35.
In March, IPC and Max Capital entered into a merger deal, under which shareholders of Max Capital were to receive 0.6429 IPC shares for each share held. IPC shareholders rejected the bid, following which IPC considered the offer from Validus Holdings. The IPC board, however, rejected the offer indicating that the proposal was riskier for IPC shareholders and would take longer to close.
Ed Noonan, Chairman and Chief Executive Officer, Validus said, "Following the overwhelming rejection of the Max transaction on Friday, we are taking steps to enable IPC's shareholders to receive the superior value offered by Validus."
Validus said it was optimistic it could garner necessary shareholder support for a special meeting to replace the IPC Board with three of its candidates.
VR closed Friday's trading at $22.73 on the NYSE. IPCR closed Friday's trading at $27.75 on the Nasdaq.
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