Flagstone Re trumps Validus' bid for IPC

Flagstone Re gets involved in the IPC arms race by making a 'superior' offer for IPC Re

Flagstone Re, the Bermudian (re)insurer, has made a $1.88bn bid for rival IPC Holdings.

In the bid, which Flagstone has been at pains to call "superior", the group will exchange Flagstone will exchange 2.638 of new common shares for each IPC common share plus $5.50 per share in cash for total consideration of $33.62 compared to IPC Re’s price of $27.77 based on today’s closing common equity prices.

This will trump the current offer of $1.61bn by Validus for IPC, which managed to squeeze out the all-share merger deal with Max Capital.

Flagstone chairman Mark Byrne, said in a statement: “Our offer contains a materially greater cash component and offers a greater overall value to IPC shareholders. Our offer is not subject to financing and is made on a friendly basis, with a plan to work with the existing board and management of IPC to preserve the business and franchise value of IPC in the combined entity."

He added: "We believe this approach together with the significant opportunities brought to the combined entity via Flagstone’s global underwriting platform and industry-leading technical infrastructure will maximize value for both IPC and Flagstone shareholders. We have substantially completed our confirmatory due diligence with no issues identified to date.”