UPDATE 2-Validus sweetens hostile IPC bid to $1.72 bln
* Validus offers $30.67 per share
* Adds 75 cents per share to cash component of bid
* IPC off 3.4 pct, Validus up 1.1 pct (Rewrites, adds details, background, updates share price)
NEW YORK, June 8 (Reuters) - Validus Holdings Ltd (VR.N) sweetened its bid for IPC Holdings Ltd IPCR.O a second time to $1.72 bln, as it tries to wrest the Bermuda reinsurer away from a deal with rival Max Capital Group Ltd (MXGL.O).
Under the latest offer -- made just before a shareholder vote scheduled for Friday on the IPC-Max deal -- IPC shareholders will get 75 cents more in cash per share. They will now get $3.75 in cash and 1.1234 Validus shares for their stock.
The offer is valued at $30.67 per share, up from $29.91 per share earlier, based on Validus' closing price on Friday, and represents a 9.8 percent premium to IPC's closing price that day.
IPC's shares closed down 96 cents to $26.97 on Monday, below the offer price, reflecting the uncertainty of a successful Validus bid.
Last month, Validus increased its bid to $1.69 billion, based on stock prices then, after IPC rejected an initial unsolicited offer made in March. The IPC board, which already has a deal with Max, rejected that bid as well.
Earlier this month, Max and IPC sweetened their existing deal as well in a bid to fend off Validus' hostile overtures.
Max and IPC agreed to pay two cash dividends that together deliver $2.50 per share to IPC shareholders following the closing of the merger. [ID:nN04248925]
IPC decided to pursue a deal more than a year ago, wanting to broaden its business beyond the property-catastrophe coverage it has written since inception 15 years ago.
It has said that Validus, which was formed in 2005 to provide property-catastrophe reinsurance, was not seen as a fit for it because their businesses are too similar.
Max claims its deal offers IPC a better opportunity to diversify since it sells about equal amounts of property and casualty insurance.
IPC was formed by Maurice "Hank" Greenberg, who solicited multiple investors to create the company. American International Group Inc (AIG.N) was IPC's largest shareholder until 2006, when AIG sold its stake.
Validus was formed by Aquiline Capital, a private equity firm formed by Jeffrey Greenberg, who had been chief executive of insurance broker Marsh & McLennan Cos Inc (MMC.N).
Validus shares closed up 27 cents, or 1.1 percent, to $24.23 on the New York Stock Exchange, while Max was off 49 cents, or 2.9 percent, to $16.46 on Nasdaq. (Reporting by Paritosh Bansal; editing by Gunna Dickson) (For more M&A news and our DealZone blog, go to www.reuters.com/deals)
