UPDATE 1-Flagstone makes competing $1.88 bln bid for IPC

* Flagstone makes competing $1.88 bln offer for IPC Re

* Flagstone bids 2.638 shares, $5.50 in cash per IPC shr

* Bid worth $33.62 a shr vs. Validus bid of $28.86 a shr

NEW YORK, July 1 (Reuters) - Flagstone Reinsurance Limited (FSR.N) made a $1.88 billion competing offer for IPC Re (IPCR.O) on Wednesday, a reinsurance company fending off an unsolicited bid from Validus Holdings Ltd. (VR.N)

Flagstone said it offered 2.638 common shares plus $5.50 in cash for a bid of $33.62 for each IPC share. That represents a 21 percent premium over IPC's closing price of $27.77.

Validus' bid of 1.1234 of its shares plus $3.75 in cash would amount to an offer of $28.86 per share, or $1.61 billion, based on Wednesday's closing price.

IPC sought other suitors last month after saying it opposes the Validus bid for being too low.

Earlier in June, IPC shareholders rejected a deal with rival insurance company Max Capital Group Ltd (MXGL.O). Validus made a competing offer for IPC in March and had worked for months to thwart the IPC-Max deal.

Validus said in June that it believed its offer was "full and fair" and that it would not revise the price again.

A Validus spokesman declined comment on the Flagstone bid. (Reporting by Michael Erman, editing by Leslie Gevirtz)