The board was reacting to Validus' announcement yesterday presenting IPC shareholders with the opportunity to exchange each of their IPC common shares for 1.2037 Validus common shares--an offer that the board previously rejected.

"IPC's board of directors strongly urges shareholders not to tender their shares to the proposed Validus exchange offer, if and when it is made," IPC's board said in yesterday's statement.

In the statement, Kenneth L. Hammond, chairman of IPC's board of directors, said, "The IPC board continues to believe that the combination with Max will result in a stronger and more diversified company with greater potential to create value for IPC shareholders."

But Validus contends that a combination between IPC and Validus is superior to one with Max because an IPC-Validus combination would create a market-leading carrier in Bermuda's short-tail reinsurance and insurance markets.

Max says it offers more diversification to IPC's monoline property-catastrophe reinsurance operation by adding long-tail liability business to the mix.

Mr. Hammond also said a merger with Max "is more certain and has a quicker path to closing than any acquisition by Validus."

Reiterating one of the conditions detailed in Validus' announcement yesterday, IPC noted that for a Validus deal to come to fruition, IPC shareholders must reject the Max amalgamation at the upcoming shareholder meeting, with a minimum of 90 percent of IPC shareholders agreeing to accept Validus' offer.

IPC also suggested that it's unclear that rating agencies will give their positive stamps to a Validus deal, while "Max and IPC have already had very positive joint meetings with each of the rating agencies regarding their planned amalgamation."

Mr. Hammond concluded: "The Max amalgamation will bring real value creation opportunities and will create a diversified and balanced platform for growth that should drive stronger performance and value for shareholders for many years."

"It was the result of a thorough and comprehensive strategic review process that included consideration of many options, and which ruled out Validus, among others."

"Validus's proposal carries substantial execution risk, would take considerably longer to close, is highly conditional and has questionable value-creation potential. It simply repackages the same economic terms as Validus's previous proposal, which IPC's board unanimously rejected."