Max Capital Group Ltd. announced yesterday that it intends to vigorously defend the enforceability of the amalgamation agreement between IPC Holdings Ltd. and Max against the "meritless lawsuit" filed by Validus Holdings Ltd. on Tuesday.

"Validus indicated previously, as part of its hostile takeover proposal of IPC, that it intended to file this lawsuit," said W Marston Becker, chairman and CEO of Max.

"While it took them some time to do so, we view this action as nothing more than another attempt by Validus to distract investors. What has not changed is the merger between IPC and Max offers shareholders an attractive opportunity to create value through the strength of a diversified underwriting platform.

"Max offers more value to IPC shareholders and more certainty of closing than the concepts that Validus continues to promote. We believe the claims by Validus are meritless, and we look forward to completing our transaction with IPC."

On April 7, 2009, IPC's board of directors unanimously reaffirmed its recommendation that IPC shareholders vote to approve the definitive amalgamation agreement between IPC and Max, and IPC's board of directors said that the "unsolicited proposal" from Validus did not constitute a better offer as defined in the agreement and plan of amalgamation with Max.

IPC outlined in its letter to Validus that the Validus offer failed to meet IPC's diversification goals and the Max transaction had significant value creation potential and upside for IPC shareholders, while the Validus proposal was less certain and riskier for IPC's shareholders and would take longer to close.