Reinsurance and insurance provider Validus Holdings Ltd. (VR) said Monday that it has delivered a revised amalgamation agreement to IPC Holdings Ltd. (IPCR) to address concerns raised by IPC. However, Validus said it would not be revising the economic terms of its offer.
Validus also said it will proceed with its plan to replace the IPC board at a special meeting of IPC shareholders.
Last week, IPC sent a letter to Validus, outlining criteria for a deal with Validus that must be met for its board to recommend Validus offer.
As the primary consideration offered to IPC shareholders is Validus stock, IPC said it needs to perform due diligence on Validus. Though Validus has twice revised its offer in light of the fact that its stock has dropped 9% since its March 31 offer, Validus' current offer continues to be at a significant discount to IPC's book value, IPC said.
IPC added that it would require that any negotiated transaction with Validus would give IPC the right to perform a proactive market check between signing and closing. The company also said with the advent of the hurricane season, any sale of the company cannot be conditioned upon the absence of catastrophe losses.
In response, Validus today said, "We have offered a number of concessions to IPC to be responsive to their stated concerns, including allowing IPC's Board the right to perform a limited market check after the signing of an agreement with Validus, eliminating the book value termination right so that the closing will not be affected by catastrophe risk, and agreeing to an enhanced severance plan for IPC employees."
Under the terms of the Validus offer, IPC shareholders would receive $3.75 in cash and 1.1234 Validus voting common shares for each IPC common share for a total consideration of $27.26 per share based on Validus' closing stock price on June 22.
VR closed Monday's regular trading session at $20.93, down 35 cents or 1.64%. IPCR ended Monday's regular trading session at $26.51, down 31 cents or 1.16%.
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