IPC Holdings (IPCR) Rejects Validus' (VR) Increased Offer

June 9, 2009 4:08 PM EDT

IPC Holdings, Ltd. (Nasdaq: IPCR) announced today that its Board of Directors has concluded that the amended amalgamation proposal announced by Validus Holdings, Ltd. (NYSE: VR) on June 8, 2009, which continues to be at a significant discount to IPC's book value and represents a mere $0.12 increase above Validus' previous offer, is not in the best interests of IPC and its shareholders as a whole and does not constitute a superior proposal.

The Board also reaffirmed its recommendation of IPC's proposed amalgamation with Max Capital Group Ltd. (Nasdaq: MXGL). On June 4, 2009, IPC announced that it will pay two special cash dividends that will deliver $2.50 per share in cash to IPC shareholders if the IPC/Max deal closes. The Board urges IPC shareholders to vote FOR the proposals related to the improved terms of the amalgamation with Max, which provides greater value and certainty, at the annual general meeting of shareholders on June 12, 2009.

Kenneth L. Hammond, Chairman of IPC's Board of Directors said, "Validus has submitted another unsolicited offer to acquire IPC at a price below book value. IPC's Board has again determined that Validus's offer does not constitute a superior proposal and is not in the best interests of IPC and its shareholders as a whole.

"Validus continues to attempt to acquire IPC's capital at a substantial discount to book value and its latest offer still does not have the same potential for delivering shareholder value as the amalgamation with Max. We also question whether removing cash from the combination of two short-tail property casualty companies at the beginning of the hurricane season is wise; such an action could negatively affect the combined company's credit ratings."

Mr. Hammond continued, "In contrast, a combined IPC and Max, with its diversified businesses and uncorrelated risk, allows shareholders of both companies to benefit from better capital utilization. The combination itself, through diversification, creates excess capital in the combined entity. Accordingly, IPC/Max will be able both to pay our shareholders cash dividends and at the same time retain an appropriate buffer to protect our capital from catastrophe events. Following closing next week, assuming shareholder approval, we will maintain our ratings and will have the flexibility to deploy capital and take advantage of favorable pricing and underwriting developments across a greater number of business lines and regions.

"As we have also told our shareholders, Validus's claim that it can complete an acquisition of IPC with 'speed and certainty' is simply wrong; it cannot be completed until mid-August, at the very earliest, even assuming that IPC were to proceed with Validus on a friendly basis. Even that very optimistic timing puts us well into hurricane season and if there is a major catastrophe event Validus could walk away from whatever is on the table and there could be no deal with any other party. In contrast, IPC shareholders can begin enjoying the benefits of the transaction with Max -- including the cash dividends and excess capital -- within a few days if the amalgamation is approved just three days from now."

IPC's Board of Directors strongly urges shareholders not to tender their shares to the Validus exchange offer. The IPC Board continues to believe that the combination with Max will provide superior value and benefits to all IPC shareholders and recommends that IPC shareholders vote in favor of the amalgamation with Max.

IPC's Board of Directors urges shareholders to vote FOR all proposals associated with the Max transaction on the WHITE proxy card at the June 12 annual general meeting of shareholders.

IPC shareholders who have tendered their shares to Validus are encouraged to withdraw them. For assistance in withdrawing IPC shares tendered, shareholders should contact their broker or IPC's information agent, Innisfree M&A at (877) 825-8621.

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