In addition to these items, Mr. Noonan during a conference call today spoke of an additional deal motivator–the prospect of creating a "new market leader" after a period of turmoil in the industry.

"This is a point in time when the industry is reshaping itself, and out of this will emerge some new leaders. We think the combined capital base [and] business platforms of the two companies will allow us to emerge as one of the leaders," Mr. Noonan said.

"We would create a combined entity with a capital base of $4.1 billion at a point in time when some of the biggest players in the industry are pulling back, dealing with their asset problems and reducing risk," he added later.

Outlining exactly how the deal would be done, Validus said it delivered an offer to the IPC board to acquire the company in a stock-for-stock merger (known as an amalgamation under Bermuda law). Under terms of the binding offer, which is not subject to due diligence, each IPC common share would be exchanged for 1.2037 Validus common shares.

Based on yesterday's closing market prices ($24.91 for Validus and $25.41 for IPC), the Validus offer represents an 18 percent premium to IPC's March 30 closing stock price and values IPC's common equity at $1.68 billion.

Should the deal be completed, Validus shareholders would own 57 percent of the combined company and IPC shareholders would own 43 percent.

Under terms of the alternative Max-IPC proposed amalgamation, announced on March 2, IPC shareholders would own the majority of the resulting company–approximately 58 percent, with Max shareholders owning about 42 percent.

According to the joint statement released by Max Capital and IPC early this month, terms of the amalgamation agreement, which their respective boards approved, had Max stockholders receiving 0.6429 IPC shares for each Max share. The deal value exceeded $900 million for the more than 56 million outstanding Max shares.

Both proposed deals are subject to shareholder approval and approvals by Bermuda regulators. Validus Chief Financial Officer Jeff Consolino noted that the Validus deal, unlike the Max deal, would not be subject to U.S. regulatory approvals because no U.S. companies are involved.

Aside from deal value, key differences are composition of insurance business and investments, Validus executives said.

While both Max and Validus said they offered business diversification benefits in their proposals, the combination with Max would bring liability business into the overall mix, while the diversifying business in the Validus deal is short-tailed business from Validus Lloyd's operation, Talbot.

The Validus executives, who said they were not contacted by IPC as it investigated potential partners, touted the benefits of combining their catastrophe reinsurance operations and the diversifying short-tail insurance business from Validus, at a time when the rates are increasing only for these capital-intensive short-tail lines.

They said that while both deals would result in a mix that's about 64 percent reinsurance and 36 percent insurance, a merger with Validus would have 95 percent of the business in short-tailed lines, while the Max-IPC combination would mean roughly a 50-50 split of long- and short-tailed business.

The Validus executives also noted that Validus' entire investment portfolio is in cash and fixed income securities, while Max Capital has dabbled in the more volatile world of alternative investments.

According to a registration filed with the Securities and Exchange Commission on March 27, the board-approved amalgamation agreement between IPC and Max Capital can be terminated under certain conditions, one of which might be a change in the recommendation by one party's board to its shareholders.

(Susanne Sclafane can be reached at [email protected], 201-526-1246)