HAMILTON, Bermuda—Validus Holdings Ltd. on Monday said it will seek to replace IPC Holdings Ltd.’s board of directors if it is unable to reach an agreement with the IPC board in a “timely fashion.”
Validus’ proposed move is the latest step in an ongoing battle with fellow Bermuda-based insurer Max Capital Group Ltd. for control of IPC. Last week, shareholders of IPC voted down a planned merger with Max Capital despite management’s recommendation to complete the deal.
“Following the overwhelming rejection of the Max transaction Friday, we are taking steps to enable IPC’s shareholders to receive the superior value offered by Validus,” said Ed Noonan, Validus’ chairman and chief executive officer, in a statement.
Validus has been working for weeks to stymie the deal between IPC and Max Capital, including boosting the cash component of its offer for IPC to $3.75 per IPC share, which brought the total value of the deal to approximately $1.72 billion, based on Validus’ closing price June 5.
IPC rejected the Validus offer and remained loyal to a $912 million merger agreement with Max Capital.
On Friday, Validus urged the IPC board to support its offer and canvassed IPC shareholders, finding 72% of them rejected the Max deal. Mr. Noonan said Validus is “optimistic” it will be able to secure the necessary support of at least an additional 10% of IPC shareholders in order to demand a special meeting with them for an election to replace IPC’s board.
“While we would like to reach an agreement with IPC’s board in view of IPC’s statement on Friday indicating its willingness to engage with Validus, our exchange offer and scheme arrangement provide alternative paths to complete a transaction, if necessary,” Mr. Noonan said in a statement. “In addition, we are also now prepared to seek the removal of IPC’s board, if appropriate.”
Validus has proposed Raymond C. Groth, Paul G. Haggis and Thomas C. Wajnert as director nominees.
Mr. Groth is an adjunct professor of business administration at The Fuqua School of Business at Duke University. Prior to that role, he was group head of mergers and acquisitions and a managing director of the mergers and acquisitions group at First Union Securities Inc., now known as Wachovia Securities.
Mr. Haggis is chairman of Alberta Enterprise Corp., a position he has held since March 2009. Previously, he served as president and CEO of the Ontario Municipal Employees Retirement System.
Mr. Wajnert is a senior adviser to Irving Place Capital Partners, formerly Bear Stearns Merchant Banking L.L.C. Prior to this role, Mr. Wajnert was managing director of Fairview Advisors L.L.C., a merchant bank, and a principal at Alta Group.
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