Reacting to Validus' latest proposal, now valued at over $1.7 billion, Kenneth L. Hammond, chair of IPC's board said in a statement yesterday that "Validus continues to attempt to acquire IPC's capital at a substantial discount to book value and its latest offer still does not have the same potential for delivering shareholder value as the amalgamation with Max."

He continued, "We also question whether removing cash from the combination of two short-tail property-casualty companies at the beginning of the hurricane season is wise; such an action could negatively affect the combined company's credit ratings."

Mr. Hammond continued, "In contrast, a combined IPC and Max, with its diversified businesses and uncorrelated risk, allows shareholders of both companies to benefit from better capital utilization. The combination itself, through diversification, creates excess capital in the combined entity," he said.

"Accordingly, IPC/Max will be able both to pay our shareholders cash dividends and at the same time retain an appropriate buffer to protect our capital from catastrophe events," Mr. Hammond said in yesterday's statement.

Validus issued its own rebuttal late yesterday, announcing that RiskMetrics Group, an independent proxy voting and governance advisory firm, continues to give its stamp of approval to the Validus deal. The group reaffirmed a prior recommendation that IPC shareholders vote against the IPC-Max combination, Validus said, but IPC, in its own statement today, accused RiskMetrics of using "bad math" to come up with its recommendation.

IPC contends that an analysis by RiskMetrics ignores book value growth for IPC's operations and the potential incremental returns on $400 million excess capital (through special dividends and potential deployment for additional earnings growth).

Offering its own independent experts, IPC also said that Glass Lewis & Co., a proxy advisory firm, has reviewed the latest deals offered by Max and Validus and reiterated a prior recommendation that IPC shareholders vote for all proposals related to the IPC/Max amalgamation.

Validus in its statement yesterday said that under its latest offer, IPC shareholders will receive $3.75 in cash and 1.1234 Validus voting common shares for each IPC common share for a total consideration of $30.36 per IPC share based on Validus' closing price yesterday.

Validus noted that this is a 12.5 percent premium to yesterday's IPC closing price.

Validus' offer contrasts with the proposed Max amalgamation, in which IPC shareholders would receive less cash ($2.50 per share) paid solely through dividends. According to Validus, "these dividends are essentially just returning IPC shareholders their own money and Validus believes, like most special dividends, [they] will not result in a meaningful increase in IPC's aggregate shareholder value."

Mr. Hammond, in his statement on behalf of IPC's board, attacked Validus' claim that it can complete an acquisition of IPC with "speed and certainty." The claim "is simply wrong," he said.

A Validus deal, he said, "cannot be completed until mid-August, at the very earliest, even assuming that IPC were to proceed with Validus on a friendly basis."

"Even that very optimistic timing puts us well into hurricane season and if there is a major catastrophe event, Validus could walk away from whatever is on the table and there could be no deal with any other party," Mr. Hammond said.

Validus' chair and chief executive officer, Ed Noonan, countered that IPC is wrong in asserting that a Validus deal can't be completed until mid-August. "In a friendly transaction, IPC shareholders would be able to receive the consideration available under Validus' exchange offer by the end of June, assuming the conditions of the exchange offer are satisfied," he said.

But Max, in its latest verbal attack, this morning, asserted that it believes Validus has conceded the point there is "no clear path" to getting its deal done in a timely manner. The concession, according to Max, came in a Validus proxy filing with the Securities and Exchange Commission this morning.

The language that Max picked up on relates to Validus' description of a proposal to obtain a court order to hold an IPC shareholder meeting relating to a scheme of arrangement.

According to Max, "Validus conceded for the first time that 'there can be no assurance that the [Bermuda Supreme Court] will exercise its discretion to convene such a meeting on the subsequent application by Validus to the Court.'"

The portion of the Validus proxy statement that Max referred to describes a May 29 decision of the Supreme Court of Bermuda.

Responding to Validus' application to convene a special court-ordered meeting of IPC shareholders to approve a "scheme of arrangement" (which would have the same economic terms as Validus share-exchange offer, but would require a lower level of IPC shareholder approval), the court "determined not to exercise its discretion to order" the IPC meeting… in advance of the vote on the Proposed Max Amalgamation."

"Based on this decision, Validus is legally permitted to pursue the scheme of arrangement if IPC shareholders reject the Proposed Max Amalgamation at IPC's annual general meeting on June 12, 2009 and it presents evidence of IPC shareholder support. However, there can be no assurance that the Court will exercise its discretion to convene such a meeting on the subsequent application by Validus to the Court," the statement said.

Max also said it believes Validus has conceded that without the support of IPC's board of directors, it cannot complete its exchange offer in a timely manner.