A late $943 million bid for Tempest Reinsurance Co. Ltd. by rival catastrophe reinsurer IPC Holdings Ltd. could trump an earlier bid by Ace Ltd. in a battle that is being noted as much for the personalities involved as for the money on the table.

 In dollar terms, the IPC offer beats the approximately $810 million offered to Tempest shareholders by Ace and it comes just two weeks prior to the proposed closing date for the Ace offer, which was made in February.

ACE said last week that it would not immediately sweeten its offer in light of the new bid.

IPC, whose largest shareholder is American International Group Inc., would become the third-largest catastrophe reinsurer in Bermuda if its bid is accepted.

Regardless of the outcome, the new bid could signal the beginning of consolidation in the Bermuda market, analysts say.

An IPC deal would be a setback for the diversification plans of Ace chairman Brian Duperreault, who has led Ace’s expansion into several new lines of business since he took over at the excess liability insurer in October 1994.

A successful IPC bid would also be seen as a victory for Mr. Duperreault’s former boss: AIG Chairman Maurice Greenberg. AIG is IPC's largest shareholder, with a 24% stake, and the reinsurer r's chairman, Joseph C.H. Johnson, is also chairman of AIG’s Bermuda subsidiary.

In fact, traces of AIG are found on all sides of the deal. AIG owns 5% of Tempest Re; Mr. Duperreault spent more than 20 years at AIG and was a star executive at the company before leaving to join Ace; and Jeffrey W. Greenberg, another Ace director and former AIG executive, is Maurice Greenberg’s son.

The late IPC bid could be an attempt by AIG to force an improved offer by Ace and consequently get a better prices for its shares of Tempest Re, analysts say.

While the IPC bid makes sound business sense, it would be seen by some as a personal victory by Mr. Greenberg over former AIG associates.

The above article was first published in the June 10, 1996, edition of Business Insurance. To read the full article and to access complete, searchable copies of Business Insurance going back the magazine’s launch in 1967, click here.