* Deal to create company with $3.5 bln in book value
* Announcement expected later on Wednesday
* Max shares off slightly (Adds details about Harbor Point, background about Max bid for IPC last year, share price, byline)
By Paritosh Bansal
NEW YORK, March 3 (Reuters) - Max Capital Group Ltd MXGL.O is expected to merge with reinsurer Harbor Point Ltd in a deal that would create a company with $3.5 billion in book value, a source familiar with the matter said on Wednesday.
A deal between the two Bermuda-based companies is expected to be announced later on Wednesday, the source said, requesting anonymity because the agreement is not yet public.
Harbor Point had a book value of about $1.63 billion, the source said.
Max Capital, a specialty insurer and reinsurer, and Harbor Point were not immediately available for comment.
Harbor Point was formed in late 2005 by a group of investors led by the Chubb Corp (CB.N) and private equity firm Stone Point Capital, according to its website.
It writes property, casualty and specialty reinsurance and when it was formed it acquired the operations of Chubb Re, including the renewal rights to Chubb Re’s in force book of assumed reinsurance business.
For Max Capital, the deal comes after its bid last year to buy Bermuda reinsurer IPC Holdings Ltd was derailed by Validus Holdings Ltd (VR.N) after a months-long battle. [ID:nN09436999]
Max Capital's shares were off 3 cents at $23.89 at mid-afternoon on Nasdaq. (Reporting by Paritosh Bansal; Editing by Lisa Von Ahn and Richard Chang) (For more M&A news and our DealZone blog, go to www.reuters.com/deals)