425
Filed by Validus Holdings, Ltd. pursuant to Rule 425
under the Securities Act of 1933, as amended,
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange of 1934, as amended
Subject Company: IPC Holdings, Ltd.
(Commission File No.: 000-27662)
The following press release was issued by Validus Holdings, Ltd. on April 5, 2009:
VALIDUS HOLDINGS NOTES SUBSTANTIAL ERROR IN MAX CAPITAL
CALCULATION OF PRO FORMA TANGIBLE BOOK VALUE
Hamilton, Bermuda – April 5, 2009 – Validus Holdings, Ltd. (“Validus”) (NYSE: VR) today announced
that it has sent a letter to the Board of Directors of IPC Holdings, Ltd. (“IPC”) (NASDAQ: IPCR)
noting that Max Capital Group Ltd. (“Max”) has made a substantial error in its calculation of pro
forma tangible book value under the terms of Validus’ proposed plan of amalgamation with IPC.
Presented below is the full text of the letter sent to the Board of Directors of IPC:
April 5, 2009
The Board of Directors of IPC Holdings, Ltd.
c/o James P. Bryce, President and Chief Executive Officer
American International Bldg.
29 Richmond Road
Pembroke, HM 08
Bermuda
Dear Members of the Board:
We are writing to call to your attention an error contained in the publicly disseminated letter
sent to you by Mr. Becker of Max Capital Group Ltd. (“Max”) dated April 2, 2009 and the
accompanying presentation materials, regarding the purported benefits of the proposed combination
of IPC Holdings, Ltd. (“IPC”) with Max (pursuant to an Amalgamation Agreement between Max and IPC
dated as of March 2, 2009 (the “Amalgamation Agreement”)), as compared to the benefits presented by
a combination of IPC with Validus Holdings, Ltd. (“Validus”) on the terms we proposed to you in our
letter dated March 31, 2009 (the “Validus Proposal”).
In his letter, Mr. Becker states (and he has been widely quoted in the media stating) that “[a]
combination with Max delivers 29% more tangible book value per share to IPC.” This is not
correct. We, and our financial advisors and SEC counsel, have reviewed this calculation and we
would like to provide you with the correct figures. Specifically, Mr. Becker’s calculation
understates the pro forma IPC share of Validus tangible book value per share by $2.74, which
results in overstating the premium calculated on this basis quite significantly. We have attached
some materials that illustrate the correct calculation. Our SEC counsel has advised us that this
error is material and that Max will be required to amend its SEC filings to correct its error.
As we noted in our letter dated April 2, 2009, putting aside this error, we believe that this
measure is the wrong framework on which to analyze whether the IPC/Max plan is superior to the
IPC/Validus plan, and refer you to the analysis in our earlier letter. We remain confident that the
IPC Board will agree the Validus Proposal is a “Superior Proposal” as defined in your Amalgamation
Agreement.
We look forward to your response to the Validus Proposal.
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Sincerely, |
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/s/ Edward J. Noonan |
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Chairman and Chief Executive Officer
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cc: Marty Dolan, J.P. Morgan Securities, Inc. |
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The materials referred to in Mr. Noonan’s letter are posted on the Company’s website at:
http://www.validusre.bm/media_centre.htm.
Details of Validus Holdings, Ltd. Offer
On March 31, 2009, Validus delivered a binding offer to the Board of Directors of IPC for the
amalgamation of Validus and IPC in an exchange of shares whereby each IPC common share would be
exchanged for 1.2037 Validus common shares. The offer values IPC shares at $29.98 per share based
on Validus’ closing stock price on March 30, 2009, the day prior to the Validus offer, representing
an 18.0% premium to IPC’s closing price on March 30, 2009 and a total value of $1.68 billion for
IPC’s common equity.
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.
Contacts:
Investors:
Validus Holdings, Ltd.
Jon Levenson, Senior Vice President
+1-441-278-9000
or
Media:
Sard Verbinnen & Co
Jamie Tully
+1-212-687-8080 x236
Jonathan Doorley
+1-212-687-8080 x282
Cautionary Note Regarding Forward-Looking Statements
This news release may include forward-looking statements, both with respect to us and our industry,
that reflect our current views with respect to future events and financial performance. Statements
that include the words “expect,” “intend,” “plan,” “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.
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. We believe that these factors include, but are not limited to,
the following: 1) uncertainty as to whether IPC will enter into and consummate the proposed
amalgamation on the terms set forth in our offer letter; 2) unpredictability and severity of
catastrophic events; 3) rating agency actions; 4) adequacy of our risk management and loss
limitation methods; 5) cyclicality of demand and pricing in the insurance and reinsurance markets;
6) our limited operating history; 7) our ability to successfully implement our business strategy
during “soft” as well as “hard” markets; 8) adequacy of our loss reserves; 9) continued
availability of capital and financing; 10) retention of key personnel; 11) competition; 12)
potential loss of business from one or more major insurance or reinsurance brokers; 13) our 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; 14) general economic and market
conditions (including inflation, volatility in the credit and capital markets, interest rates and
foreign currency exchange rates); 15) the integration of Talbot or other businesses we may acquire
or new business ventures we may start; 16) the effect on our investment portfolio of changing
financial market conditions including inflation, interest rates, liquidity and other factors; 17)
acts of terrorism or outbreak of war; and 18) availability of reinsurance and retrocessional
coverage, 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 our most recent reports on Form
10-K and Form 10-Q and other documents on file with the Securities and Exchange Commission. Any
forward-looking statements made in this news release are qualified by these cautionary statements,
and there can be no assurance that the actual results or developments anticipated by us will be
realized or, even if substantially realized, that they will have the expected consequences to, or
effects on, us or our business or operations. We 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 Transaction and Where to Find It:
This material relates to a proposed business combination transaction between Validus and IPC which
may become the subject of a registration statement and proxy statement filed by Validus with the
Securities and Exchange Commission (“SEC”). This material is not a substitute for the registration
statement and proxy statement that Validus would file with the SEC or any other documents which
Validus may send to its or IPC’s shareholders in connection with the proposed transaction.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND PROXY STATEMENT AND
ALL OTHER RELEVANT DOCUMENTS IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. All such documents, if filed, would be available free
of charge at the SEC’s website (www.sec.gov) or by directing a request to Validus, at Jon Levenson,
Senior Vice President, at +1-441-278-9000.
Participants in the Solicitation:
Validus and its directors, executive officers and other employees may be deemed to be participants
in any solicitation of shareholders in connection with the proposed transaction. Information about
Validus’ directors and executive officers is available in Validus’ proxy statement, dated March 25,
2009 for its 2009 annual general meeting of shareholders.