Validus Holdings, Ltd. (�Validus�) (NYSE: VR) today announced
that the boards of directors of both Validus and IPC Holdings, Ltd.
(�IPC�) (NASDAQ: IPCR) have approved a definitive amalgamation
agreement that will create a leading Bermuda carrier in the
short-tail reinsurance and insurance market. Under the terms of the
agreement, IPC shareholders will receive $7.50 in cash and 0.9727
Validus voting common shares for each IPC common share. The Validus
consideration provides IPC shareholders with a 24.9% premium and
$31.73 per share based on IPC�s and Validus� closing stock prices
on March 30, 2009, the last trading day before the announcement of
Validus� initial offer.
The final transaction terms represent an adjustment to the
structure of Validus� previous offer, under which IPC shareholders
would have received $3.75 in cash and 1.1234 Validus voting common
shares for each IPC common share, in order to provide IPC
shareholders with significantly greater cash consideration, while
not changing the overall transaction value based on the March 30,
2009 closing stock prices for IPC and Validus.
Completion of the transaction, which is expected to take place
in the third quarter of 2009, is subject to customary closing
conditions, including Validus and IPC shareholder approvals.
Aquiline Capital Partners LLC, Vestar Capital Partners, and New
Mountain Capital, LLC, which collectively owned approximately 38%
of Validus� outstanding voting common shares as of April 30, 2009,
have agreed to vote in favor of the issuance of Validus shares in
connection with the transaction. Upon closing of the transaction,
Validus shareholders will own approximately 62% of the combined
company on a fully diluted basis, with IPC shareholders owning
approximately 38%.
Ed Noonan, Validus� Chairman and Chief Executive Officer,
stated, �This is a compelling strategic combination that positions
us exceptionally well to build on our solid track record of
underwriting performance and book value growth. We are confident
that it will generate superior value for both Validus and IPC
shareholders. Validus will have significantly greater size and
scale to take advantage of attractive rate trends across our
business lines and growing overall demand for reinsurance from
capital-constrained businesses. In addition, clients of both
companies will benefit from our strong commitment to existing
business lines, superior technical expertise and increased capacity
to meet their needs.�
The combined company will have:
- $3.4 billion in GAAP
shareholders� equity (compared with shareholders� equity of $2.0
billion for Validus and $1.8 billion for IPC as of March 31, 2009),
enabling the company to capture highly attractive market
opportunities in the global insurance and reinsurance markets;
- A strong balance sheet and
conservative investment portfolio, which are of critical importance
as buyers increasingly scrutinize counterparty risk;
- Profitable diversification into
multiple short-tail lines with favorable rate trends;
- Stronger relationships with
major reinsurance brokers, providing increased opportunity to lead
placements; and
- A deep, experienced and stable
management team.
Validus will continue to be led by its current senior management
team, including Ed Noonan, Chairman and Chief Executive
Officer.
Validus will be withdrawing and terminating its Exchange Offer
for all of the outstanding common shares of IPC and will instruct
BNY Mellon Shareowner Services to promptly return all IPC common
shares previously tendered to Validus. Additionally, Validus has
terminated its solicitation efforts in connection with its other
previously announced alternative steps to complete a transaction
with IPC, including a scheme of arrangement and calling of a
special meeting of IPC shareholders.
Greenhill & Co., LLC acted as financial advisor to Validus
and Skadden, Arps, Slate, Meagher & Flom LLP, Cahill Gordon
& Reindel LLP and Appleby provided legal advice.
Conference Call
Validus and IPC will host a joint conference call for investors,
analysts, and other interested parties today at 10:00 a.m., Eastern
Time. The conference call may be accessed by dialing 1-800-860-2442
(U.S. callers) or 1-412-858-4600 (International callers). Those who
intend to participate in the call should dial in at least 10
minutes in advance. Presentation materials for the call will be
available on Validus� website, www.validusre.bm, in advance of the
call. A live webcast of the call will be available via the website
of Validus at www.validusre.bm. A replay of the call will be
available through July 23, 2009 by dialing 1-877-344-7529 and
entering the passcode 432229#. A replay of the webcast will be
available on the Validus website.
About Validus Holdings, Ltd.
Validus Holdings, Ltd. is a provider of reinsurance and
insurance, conducting its operations worldwide through two
wholly-owned subsidiaries, Validus Reinsurance, Ltd. (�Validus Re�)
and Talbot Holdings Ltd. (�Talbot�). Validus Re is a Bermuda based
reinsurer focused on short-tail lines of reinsurance. Talbot is the
Bermuda parent of the specialty insurance group primarily operating
within the Lloyd�s insurance market through Syndicate 1183.
Cautionary Note Regarding Forward-Looking Statements
This press release may include forward-looking statements, both
with respect to the parties and their industry, that reflect their
current views with respect to future events and financial
performance. Statements that include the words �expect,� �intend,�
�plan,� �confident,� �believe,� �project,� �anticipate,� �will,�
�may� and similar statements of a future or forward-looking nature
identify forward-looking statements. All forward-looking statements
address matters that involve risks and uncertainties, many of which
are beyond the parties� control. Accordingly, there are or will be
important factors that could cause actual results to differ
materially from those indicated in such statements and, therefore,
you should not place undue reliance on any such statements. The
parties believe that these factors include, but are not limited to,
the following: 1) Validus and IPC may be unable to complete the
proposed amalgamation because, among other reasons, conditions to
the closing of the proposed amalgamation may not be satisfied or
waived; 2) uncertainty as to the actual premium that will be
realized by IPC shareholders in connection with the proposed
amalgamation; 3) uncertainty as to the long-term value of Validus
common shares; 4) unpredictability and severity of catastrophic
events; 5) rating agency actions; 6) adequacy of Validus� or IPC�s
risk management and loss limitation methods; 7) cyclicality of
demand and pricing in the insurance and reinsurance markets; 8)
Validus� limited operating history; 9) Validus� ability to
implement its business strategy during �soft� as well as �hard�
markets; 10) adequacy of Validus� or IPC�s loss reserves; 11)
continued availability of capital and financing; 12) retention of
key personnel; 13) competition; 14) potential loss of business from
one or more major insurance or reinsurance brokers; 15) Validus� or
IPC�s ability to implement, successfully and on a timely basis,
complex infrastructure, distribution capabilities, systems,
procedures and internal controls, and to develop accurate actuarial
data to support the business and regulatory and reporting
requirements; 16) general economic and market conditions (including
inflation, volatility in the credit and capital markets, interest
rates and foreign currency exchange rates); 17) the integration of
Talbot or other businesses Validus may acquire or new business
ventures Validus may start; 18) the effect on Validus� or IPC�s
investment portfolios of changing financial market conditions
including inflation, interest rates, liquidity and other factors;
19) acts of terrorism or outbreak of war; 20) availability of
reinsurance and retrocessional coverage; 21) failure to realize the
anticipated benefits of the proposed amalgamation, including as a
result of failure or delay in integrating the businesses of Validus
and IPC; and 22) the outcome of any legal proceedings to the extent
initiated against Validus, IPC and others following the
announcement of the proposed amalgamation, as well as management�s
response to any of the aforementioned factors.
The foregoing review of important factors should not be
construed as exhaustive and should be read in conjunction with the
other cautionary statements that are included herein and elsewhere,
including the risk factors included in Validus� most recent reports
on Form 10-K and Form 10-Q and the risk factors included in IPC�s
most recent reports on Form 10-K and Form 10-Q and other documents
of Validus and IPC on file with the Securities and Exchange
Commission (�SEC�). Any forward-looking statements made in this
press release are qualified by these cautionary statements, and
there can be no assurance that the actual results or developments
anticipated by Validus will be realized or, even if substantially
realized, that they will have the expected consequences to, or
effects on, Validus or its business or operations. Except as
required by law, the parties undertake no obligation to update
publicly or revise any forward-looking statement, whether as a
result of new information, future developments or otherwise.
Additional Information about the Proposed Amalgamation and Where
to Find It:
The issuance of Validus shares to IPC shareholders in the
amalgamation will be submitted to shareholders of Validus for their
consideration. The proposed amalgamation will be submitted to
shareholders of IPC for their consideration. Validus and IPC
shareholders are urged to read the joint proxy statement/prospectus
for the proposed amalgamation when it is filed, and any amendment
or supplement thereto that may be filed, with the SEC because they
will contain important information. This press release is not a
substitute for the joint proxy statement/prospectus or any other
documents which Validus or IPC may send to their respective
shareholders in connection with the proposed amalgamation. All such
documents, when filed, will be available free of charge at the
SEC�s website (www.sec.gov ) or by directing a request to Validus
through Jon Levenson, Senior Vice President, at +1-441-278-9000, or
IPC through John Weale, Chief Executive Officer and Chief Financial
Officer, at +1-441-298-5100.
This press release does not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such jurisdiction. No offering of securities
shall be made except by means of a proxy statement/prospectus
meeting the requirements of Section 10 of the Securities Act of
1933, as amended.
Participants in the Solicitation:
Validus and IPC and their directors and executive officers are
deemed to be participants in any solicitation of Validus and IPC
shareholders in connection with the proposed amalgamation.
Information about Validus� directors and executive officers is
available in Validus� definitive proxy statement, dated March 25,
2009, for its 2009 annual general meeting of shareholders.
Information about IPC�s directors and executive officers is
available in IPC�s Amendment No. 1 to Form 10-K, dated April 30,
2009, for the fiscal year ended December 31, 2008.
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