As filed with the Securities and Exchange Commission on June 12, 2009

Registration Number 333-159148

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 4

to

Form S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

VALIDUS HOLDINGS, LTD.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

19 Par-La-Ville Road, Hamilton, HM 11 Bermuda

(441) 278-9000

(Address, including zip code, and telephone number, including area code,

of registrant’s principal executive offices)

C. Jerome Dill

Executive Vice President & General Counsel

Validus Holdings, Ltd.

19 Par-La-Ville Road, Hamilton, HM 11 Bermuda

(441) 278-9000

(Name, address, including zip code, and telephone number, including area code,

of agent for service)

 

Copies to:

Approximate date of commencement of proposed sale of securities to the public:  As soon as practicable after the effective date of this Registration Statement.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box  o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering  o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

(Do not check if a smaller reporting company)

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  o
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  o

 

 

CALCULATION OF REGISTRATION FEE

 

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

Offer to Exchange

Each Outstanding Common Share

of

IPC HOLDINGS, LTD.

for

1.1234 Validus Holdings, Ltd. Voting Common Shares

and

$3.75 in Cash

by

VALIDUS HOLDINGS, LTD.

 

Validus Holdings, Ltd., which we refer to as “Validus” or “we,” “us” or “our,” is offering, upon the terms and subject to the conditions set forth in this prospectus/offer to exchange and in the accompanying revised pink letter of transmittal, to exchange 1.1234 voting common shares, par value $0.175 per share, of Validus, which we refer to as “Validus common shares,” and $3.75 in cash (less any applicable withholding taxes and without interest) for each outstanding common share of IPC Holdings, Ltd., which we refer to as “IPC,” par value $0.01 per share, which we refer to as “IPC common shares,” you validly tender and do not properly withdraw before the expiration time of the exchange offer described below. In addition, you will receive cash in lieu of any fractional Validus common share to which you may be entitled.

 

This prospectus/offer to exchange amends and supersedes information included in the prospectus/offer to exchange originally filed with the Securities and Exchange Commission on May 12, 2009, as amended on May 13, 2009, May 21, 2009 and June 1, 2009.

 

THE EXCHANGE OFFER AND THE WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME (6:00 P.M. ATLANTIC TIME), ON FRIDAY, JUNE 26, 2009, OR THE “EXPIRATION TIME OF THE EXCHANGE OFFER,” UNLESS EXTENDED. SHARES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION TIME OF THE EXCHANGE OFFER, BUT NOT DURING ANY SUBSEQUENT OFFERING PERIOD.

 

Validus common shares trade on the New York Stock Exchange under the symbol “VR.” IPC common shares trade on the NASDAQ Global Select Market under the symbol “IPCR” and on the Bermuda Stock Exchange under the symbol “IPCR BH.”

 

FOR A DISCUSSION OF RISKS AND OTHER FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION WITH THE EXCHANGE OFFER, PLEASE CAREFULLY READ THE SECTION OF THIS PROSPECTUS/OFFER TO EXCHANGE ENTITLED “RISK FACTORS.”

 

Validus’ obligation to accept IPC common shares for exchange and to exchange any IPC common shares for Validus common shares is subject to conditions, including a condition that 90% of the then-outstanding number of IPC common shares on a fully-diluted basis (excluding any IPC common shares owned by Validus, its subsidiaries or IPC) have been validly tendered into the exchange offer and not withdrawn and a condition that the Agreement and Plan of Amalgamation, dated as of March 1, 2009, as amended, among Max Capital Group Ltd., which we refer to as “Max,” IPC and IPC Limited, which we refer to as the “Max amalgamation agreement,” has been terminated. The conditions to the exchange offer are described in the section of this prospectus/offer to exchange entitled “The Exchange Offer — Conditions of the Exchange Offer.”

 

On March 31, 2009, Validus publicly announced that it had delivered an offer, which we refer to as the “initial Validus offer,” to IPC for the amalgamation of Validus and IPC whereby each issued and outstanding IPC common share would be exchanged for 1.2037 Validus common shares. Validus amended the initial Validus offer on May 18, 2009 to include 1.1234 Validus common shares and $3.00 in cash (less any applicable withholding taxes and without interest). On June 8, 2009, Validus publicly announced that it had delivered an increased offer, which we refer to as the “Validus amalgamation offer,” to IPC, to acquire each outstanding IPC common share in exchange for (i) 1.1234 Validus common shares and (ii) $3.75 in cash (less any applicable withholding taxes and without interest). Validus is making the exchange offer as an alternative to the Validus amalgamation offer in order to acquire all of the issued and outstanding IPC common shares.

 

Validus has not authorized any person to provide any information or to make any representation in connection with the exchange offer other than the information contained or incorporated by reference in this prospectus/offer to exchange, and if any person provides any of this information or makes any representation of this kind, that information or representation must not be relied upon as having been authorized by Validus.

 

VALIDUS IS NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND A PROXY TO VALIDUS. As described in this prospectus/offer to exchange, Validus is separately soliciting proxies to vote at the IPC annual general meeting against the proposed amalgamation of IPC and Max, which we refer to as the “proposed Max amalgamation,” and intends to solicit proxies through separate proxy solicitation material in connection with various matters which are described in the section of this prospectus/offer to exchange entitled “Solicitation of Proxies.” Any such proxy solicitation is being made, or will be made, only pursuant to separate proxy materials complying with the requirements of the rules and regulations of the Securities and Exchange Commission.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus/offer to exchange. Any representation to the contrary is a criminal offense.

 

The dealer manager for the exchange offer is:

 

The date of this prospectus/offer to exchange is June 12, 2009

 

TABLE OF CONTENTS

 

 

 

THIS PROSPECTUS/OFFER TO EXCHANGE INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION ABOUT VALIDUS AND IPC FROM DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION THAT HAVE NOT BEEN INCLUDED IN OR DELIVERED WITH THIS PROSPECTUS/OFFER TO EXCHANGE.

 

THIS INFORMATION IS AVAILABLE AT THE INTERNET WEBSITE THE SECURITIES AND EXCHANGE COMMISSION MAINTAINS AT http://www.sec.gov, AS WELL AS FROM OTHER SOURCES. PLEASE SEE THE SECTION OF THIS PROSPECTUS/OFFER TO EXCHANGE ENTITLED “WHERE YOU CAN FIND MORE INFORMATION.” YOU ALSO MAY REQUEST COPIES OF THESE DOCUMENTS FROM VALIDUS, WITHOUT CHARGE, UPON WRITTEN OR ORAL REQUEST TO VALIDUS’ INFORMATION AGENT AT ITS ADDRESS OR TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS PROSPECTUS/OFFER TO EXCHANGE. IN ORDER TO RECEIVE TIMELY DELIVERY OF THE DOCUMENTS, YOU MUST MAKE YOUR REQUEST NO LATER THAN JUNE 19, 2009, OR FIVE BUSINESS DAYS PRIOR TO THE EXPIRATION TIME OF THE EXCHANGE OFFER, WHICHEVER IS LATER.

The exchange offer does not constitute a solicitation of proxies. Any solicitation of proxies by Validus will be made only pursuant to separate proxy solicitation materials complying with the requirements of Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As described in this prospectus/offer to exchange, Validus is soliciting proxies to vote at the IPC annual general meeting against the proposed Max amalgamation and intends to solicit proxies through separate proxy solicitation materials in connection with various matters which are described in the section of this prospectus/offer to exchange entitled “Solicitation of Proxies.” Each shareholder is urged to read any proxy statement regarding the business to be conducted at the applicable meeting, if and when it becomes available, because it will contain important information. Any such proxy statement has been, or will be, filed with the Securities and Exchange Commission. When completed, each definitive proxy statement of Validus and an accompanying proxy card of Validus will be made available to applicable shareholders and such shareholders will be able to obtain a free copy of any proxy statement, as well as other filings containing information about the parties (including information regarding the participants in any proxy solicitation (which may include Validus’ officers and directors and other persons) and a description of their direct and indirect interests, by security holdings or otherwise), from the Securities and Exchange Commission’s web site at http://www.sec.gov. Each such proxy statement (when available) and these other documents may also be obtained for free from Validus’ web site at http://www.validusre.bm.

 

Below are some of the questions that you as a holder of IPC common shares may have regarding the exchange offer and answers to those questions. The answers to these questions do not contain all the information relevant to your decision whether to tender your IPC common shares, and Validus urges you to read carefully the remainder of this prospectus/offer to exchange and the pink letter of transmittal circulated with this prospectus/offer to exchange, which we refer to as the “revised pink letter of transmittal.”

 

Who is offering to buy my IPC common shares?

 

The exchange offer is made by Validus Holdings, Ltd., a Bermuda exempted company. Validus is a provider of reinsurance and insurance, conducting its operations worldwide through two wholly-owned subsidiaries, Validus Reinsurance, Ltd., which we refer to as “Validus Re,” and Talbot Holdings Ltd., which we refer to as “Talbot.” Validus Re is a Bermuda-based reinsurer focused on short-tail lines of reinsurance. Talbot is the Bermuda parent of the specialty insurance group primarily operating within the Lloyd’s insurance market through Syndicate 1183.

 

What classes and amounts of IPC securities is Validus seeking for exchange in the exchange offer?

 

Validus seeks to acquire all of the issued and outstanding IPC common shares.

 

How has the exchange offer changed?

 

Validus has increased the offer consideration per IPC common share so that it now consists of 1.1234 Validus common shares and $3.75 in cash (less any applicable withholding taxes and without interest).

 

Why did Validus increase its offer and add cash to the consideration to be paid in the exchange offer?

 

Validus increased the consideration to be paid in the exchange offer in order to demonstrate its commitment to completing the acquisition of IPC. Moreover, Validus believes that by adjusting the exchange ratio in the exchange offer, Validus is able to provide IPC shareholders with a meaningful cash component, a request that Validus has heard repeatedly from IPC shareholders.

 

If I have already tendered my IPC common shares, do I need to do anything to tender into the revised exchange offer for the increased offer consideration?

 

If you have already tendered your IPC common shares, you do not need to do anything to tender into the revised exchange offer. IPC common shares validly tendered and not properly withdrawn prior to the date of this prospectus/offer to exchange will automatically be considered to have been tendered pursuant to the revised terms of the exchange offer set forth in this prospectus/offer to exchange. All IPC shareholders will receive the highest consideration received by IPC shareholders whose IPC common shares are tendered and accepted for exchange in the exchange offer. Therefore, if you have already tendered your IPC common shares, including if you did so with the blue letter of transmittal previously circulated with the prospectus/offer to exchange dated May 13, 2009, which we refer to as the “original blue letter of transmittal,” you do not have to take any action to be entitled to receive the offer consideration described in this prospectus/offer to exchange if your shares are accepted for exchange and exchanged pursuant to the exchange offer.

 

What will I receive for my IPC common shares in the exchange offer?

 

Validus is offering, upon the terms and subject to the conditions set forth in this prospectus/offer to exchange and in the accompanying revised pink letter of transmittal, to exchange 1.1234 Validus common shares and $3.75 in cash (less any applicable withholding taxes and without interest) for each outstanding IPC common share you validly tender and do not properly withdraw before the expiration time of the exchange offer. Because no fractional Validus common shares will be issued, to the extent that you would be entitled to receive fractional Validus common shares, you will receive cash in lieu of the fractional share interest to which you would otherwise be entitled.

 

Based upon closing market prices as of June 5, 2009, the day prior to the announcement of the increased offer, the exchange offer represented a 9.8% premium to the closing price of IPC common shares that day and a 24.9% premium based on the closing prices of IPC common shares and Validus common shares on March 30, 2009, the last trading day before the announcement of the initial Validus offer. The price of Validus common shares fluctuates and may be higher or lower than in these examples at the time IPC common shares are exchanged pursuant to the exchange offer. On June 11 2009, the last practicable date prior to the filing of this prospectus/offer to exchange, the closing price of a Validus common share was $23.65. Based on the closing price of Validus common shares on June 11, 2009, the exchange offer has a value of $30.32 per IPC common share. Shareholders are encouraged to obtain current market quotations for Validus common shares and IPC common shares prior to making any decision with respect to the exchange offer.

 

Please also see the section of this prospectus/offer to exchange entitled “Risk Factors” for a discussion, among other things, of the effect of fluctuations in the market price of Validus common shares.

 

How does the exchange offer relate to the Validus amalgamation offer?

 

On March 31, 2009, Validus publicly announced that it had delivered the initial Validus offer to IPC, pursuant to which each issued and outstanding IPC common share would be exchanged for 1.2037 Validus common shares.

 

In connection with the delivery of the initial Validus offer to IPC, Validus delivered a signed amalgamation agreement that would be binding on Validus upon countersignature by IPC, which, together with the two amendments described below, we refer to as the “Validus amalgamation agreement,” so that, upon a termination of the Max amalgamation agreement, IPC would have the certainty of Validus’ transaction and would be able to sign the Validus amalgamation agreement. IPC announced on April 7, 2009 that its board of directors had determined that the initial Validus offer did not constitute a superior proposal to the Max amalgamation agreement and reaffirmed its support of the proposed Max amalgamation.

 

Validus is making the exchange offer as an alternative method for Validus to acquire all of the issued and outstanding IPC common shares. Validus commenced the exchange offer on May 12, 2009 on the economic terms set forth in the initial Validus offer. On May 14, 2009, IPC filed a Solicitation/Recommendation Statement on Schedule 14D-9 reporting that IPC’s board had met on May 13, 2009 and determined to recommend that IPC shareholders reject the exchange offer and not tender their IPC common shares to Validus. Validus amended the initial Validus offer on May 18, 2009 to include 1.1234 Validus common shares and $3.00 in cash (less any applicable withholding taxes and without interest) and delivered an executed amendment to the Validus amalgamation agreement to IPC. On May 21, 2009, IPC filed an amendment to its Solicitation/Recommendation Statement on Schedule 14D-9 reporting that IPC’s board had met on May 20, 2009 and stating the IPC board of directors’ recommendation that IPC shareholders reject the revised terms of the exchange offer and not tender their IPC common shares to Validus pursuant to the exchange offer. On June 8, 2009, Validus announced that it had increased the offer consideration such that each IPC common share validly tendered into the exchange offer would be exchanged for 1.1234 Validus common shares and $3.75 in cash (less any applicable withholding taxes and without interest) and delivered an executed amendment to the Validus amalgamation agreement to IPC to reflect this increased consideration. On June 9, 2009, IPC filed an amendment to its Solicitation/Recommendation Statement on Schedule 14D-9 reporting that IPC’s board had met on June 9, 2009 and stating the IPC board of directors’ recommendation that IPC shareholders reject the revised terms of the exchange offer and not tender their IPC common shares to Validus pursuant to the exchange offer. As of the date of this prospectus/offer to exchange, IPC has not been willing to meet or negotiate with Validus.

 

We are still hopeful that IPC’s board of directors will recognize that the Validus amalgamation offer, as amended to increase the consideration offered and revise certain other terms, is a “superior proposal” (as defined in the Max amalgamation agreement) and IPC’s board of directors will approve the Validus amalgamation agreement after the Max amalgamation agreement is terminated.

 

What is the purpose of the exchange offer?

 

The exchange offer is one part of our plan to acquire all of the issued and outstanding IPC common shares. We intend to, promptly after completion of the exchange offer, seek to acquire, which we refer to as the “second-step acquisition,” all shares of those shareholders who choose not to tender their IPC common shares pursuant to the

exchange offer, in accordance with either Section 102 or Section 103 of The Companies Act of 1981 of Bermuda, as amended, which we refer to as the “Companies Act.” The purpose of the second-step acquisition is for Validus to acquire all outstanding IPC common shares that are not acquired in the exchange offer on the same terms as in the exchange offer.

 

Section 102 of the Companies Act permits a person acquiring shares of a Bermuda company under a “scheme” or “contract” that has been approved by at least 90% in value of the shares subject to the “scheme” or “contract” to seek to acquire the shares of any shareholders dissenting from such “scheme” or “contract.” The exchange offer will constitute a “scheme” or “contract” pursuant to Section 102 of the Companies Act. As a result, if Validus acquires at least 90% in value of the IPC common shares subject to the exchange offer (other than IPC common shares owned by Validus, its subsidiaries or IPC), Validus will have the right, subject to compliance with the requirements of Section 102 of the Companies Act, to acquire each remaining IPC common share, subject to the rights of dissenting shareholders as set forth in Section 102, which include the right to petition the Supreme Court of Bermuda for an order as the court sees fit.

 

Section 103 of the Companies Act permits the holder of at least 95% of any class of shares in a Bermuda company to give notice to the remaining shareholders of such class of such holder’s intention to acquire the outstanding shares of the company on the terms set out in the holder’s notice. The acquisition of remaining shares will be on the terms set forth in the holder’s notice unless a remaining shareholder applies to the Supreme Court of Bermuda for an appraisal of its shares. Therefore, if Validus acquires at least 95% of the outstanding IPC common shares, Validus will have the right, pursuant to Section 103, to acquire each remaining IPC common share on the same terms as in the exchange offer, or at the appraised value as determined by the court.

 

On May 21, 2009, the Chairman of IPC’s board of directors sent a letter to Validus which stated that IPC’s bye-laws would prevent Validus from becoming the legal owner of 10% or more of the IPC common shares. Validus believes, based upon the advice of Bermuda and UK counsel, that IPC’s bye-laws will not operate to prevent Validus from accepting IPC common shares for exchange in the exchange offer and acquiring beneficial ownership of any such IPC common shares. IPC has stated in a letter to its shareholders that IPC believes that Validus faces substantial legal uncertainties if it attempts to squeeze out IPC’s remaining shareholders on such basis. Validus will take such actions as are necessary, including by seeking a judgment of a Bermuda court, to enforce its rights under Section 102 and/or Section 103 of the Companies Act to the extent that any person (including IPC, IPC’s board of directors or any IPC shareholder) seeks to restrict the operation thereof. However, resolution of any such actions or proceedings is not a condition to the exchange offer.

 

After the second-step acquisition, former remaining IPC shareholders will no longer have any ownership interest in IPC and will be shareholders of Validus and Validus will own all of the issued and outstanding IPC common shares. Validus intends, promptly following the second-step acquisition, to amalgamate IPC with a newly-formed, wholly-owned subsidiary of Validus in accordance with Section 107 of the Companies Act. Please see the sections of this prospectus/offer to exchange entitled “The Exchange Offer — Purpose and Structure of the Exchange Offer”; “The Exchange Offer — Statutory Requirements; Second-Step Acquisition”; “The Exchange Offer — Short-Form Amalgamation”; and “The Exchange Offer — Plans for IPC.”

 

Why is Validus proposing the exchange offer?

 

The Validus common shares to be issued and cash to be paid to IPC shareholders in exchange for IPC common shares in the exchange offer and second-step acquisition will provide IPC shareholders with an immediate premium for their IPC common shares, and will allow IPC shareholders to participate in the growth and opportunities of the combined company while receiving cash for a portion of their investment in IPC common shares. Validus believes that the acquisition of IPC represents a compelling combination and excellent strategic fit that will enable the combined company to capitalize on opportunities in the global reinsurance market. Successful completion of the exchange offer would allow IPC shareholders to benefit from the superior growth potential of a combined company that would be a leading carrier in Bermuda’s short-tail reinsurance and insurance markets, with a strong balance sheet and quality diversification in profitable business lines.

Why is the exchange offer better than the proposed Max amalgamation?

 

Validus believes that the combination of Validus and IPC offers a number of benefits to holders of IPC common shares, including the following:

 

The exchange offer provides a premium to IPC shareholders.

 

 

 

The Validus common shares to be issued to IPC shareholders in exchange for IPC common shares under the exchange offer represent what we believe is an attractive investment.

 

 

A Validus/IPC combination will have a strong balance sheet and minimal exposure to risky asset classes.

 

 

 

 

Validus offers IPC a highly experienced, first class management team.

 

 

The exchange offer and second-step acquisition provide IPC shareholders with an opportunity for stable, profitable diversification into attractive business lines and further growth.

 

 

Have you discussed the exchange offer with the board of IPC?

 

No, we have not. On March 31, 2009, Validus delivered the initial Validus offer to IPC, which included the Validus amalgamation agreement signed by Validus. IPC announced on April 7, 2009 that its board of directors determined that the initial Validus offer did not constitute a superior proposal to the Max amalgamation agreement and reaffirmed its support of the proposed Max amalgamation. Because of a prohibition in the Max amalgamation agreement that prevents IPC from even discussing the Validus amalgamation offer with Validus, with no provision allowing IPC’s directors to enter into such discussions in order to comply with any fiduciary or other duties that they may have, we made the exchange offer without discussing it with IPC. On May 14, 2009, IPC filed a Solicitation/Recommendation Statement on Schedule 14D-9 reporting that IPC’s board had met on May 13, 2009 and determined to recommend that IPC shareholders reject the exchange offer and not tender their IPC common shares to Validus. On May 21, 2009, IPC filed an amendment to its Solicitation/Recommendation Statement on Schedule 14D-9 reporting that IPC’s board had met on May 20, 2009 and stating the IPC board of directors’ recommendation that IPC shareholders reject the May 18, 2009 terms of the exchange offer and not tender their IPC common shares to Validus pursuant to the exchange offer. On June 9, 2009, IPC filed an amendment to its Solicitation/Recommendation Statement on Schedule 14D-9 reporting that IPC’s board had met on June 9, 2009 and stating the IPC board of directors’ recommendation that IPC shareholders reject the June 8, 2009 terms of the exchange offer and not tender their IPC common shares to Validus pursuant to the exchange offer. Additionally, IPC has not sought any information from Validus or to have any discussions with Validus.

 

When do you expect the exchange offer to be completed?

 

We believe that we would be able to complete the exchange offer in June 2009, promptly following termination of the Max amalgamation agreement (and subject to the satisfaction or waiver of the other conditions to the exchange offer), based on the following. The expiration time of the exchange offer will be June 26, 2009, unless extended. As a result, if the conditions of the exchange offer are satisfied or waived at the expiration time of the exchange offer, Validus would be able to acquire all of the IPC common shares that are validly tendered pursuant to the exchange offer.

 

Will you increase the consideration being offered in the exchange offer?

 

Validus believes that the increased offer consideration represents full and fair value for IPC common shares. Validus is under no obligation to increase the offer consideration again and does not currently intend to do so.

 

What are the conditions of the exchange offer?

 

The exchange offer is conditioned upon, among other things, the following:

 

 

 

The exchange offer is subject to additional conditions referred to in the section of this prospectus/offer to exchange entitled “The Exchange Offer — Conditions of the Exchange Offer,” including that IPC shareholders shall not have approved the Max amalgamation agreement and that there shall have been no business combination consummated between IPC and Max. The exchange offer is not conditioned on the receipt of regulatory approvals or the elimination of the Max termination fee.

 

What actions do you propose to take with respect to the proposed Max amalgamation?

 

Validus has mailed definitive proxy materials and proxy cards to IPC shareholders to solicit votes at the IPC annual general meeting against the proposed Max amalgamation.

 

The exchange offer does not constitute a solicitation of proxies in connection with such matters. Any such solicitation will be made only pursuant to separate proxy materials complying with the requirements of the rules and regulations of the SEC.

 

In addition, Validus has filed legal proceedings in the Supreme Court of Bermuda against IPC, IPC Limited and Max, which we refer to as the “Bermuda claim.” The Bermuda claim challenges the validity of the Max termination fee and provisions which restrict the ability of IPC to discuss competing proposals with third parties, which we refer to as the “no talk provisions,” in the Max amalgamation agreement. Validus is seeking, among other things, an injunction to restrain payment of the Max termination fee and to restrain operation of the no-talk provisions on the bases that (1) because of its excessive size, the termination fee amounts to an unlawful penalty under Bermuda law and is accordingly unenforceable, and (2) entry into the Max amalgamation agreement, in circumstances where such agreement contained the Max termination fee and the no talk provisions, constituted a breach of the IPC directors’ fiduciary or other duties. Please see the section of this prospectus/offer to exchange entitled “The Exchange Offer — Certain Legal Matters; Regulatory Approvals.”

How does the exchange offer relate to the Validus amalgamation offer and the Validus scheme of arrangement?

 

The exchange offer is one of the parts of our plan to acquire all of the issued and outstanding IPC common shares.

 

First, Validus has solicited proxies from IPC shareholders to vote against the proposed Max amalgamation. If the proposed Max amalgamation is voted down by IPC shareholders, IPC’s board of directors will be able to terminate the Max amalgamation agreement and enter into the Validus amalgamation agreement. If IPC’s board of directors were to enter into the Validus amalgamation agreement promptly following the termination of the Max amalgamation agreement, Validus believes the amalgamation contemplated by the Validus amalgamation offer could be completed in late July 2009 based on the assumption that IPC terminates the Max amalgamation agreement promptly following its June 12, 2009 annual general meeting, allowing approximately 45 days to hold a special general meeting of IPC shareholders to obtain the required shareholder approval and to satisfy the other conditions in the Validus amalgamation agreement.

 

Second, Validus has commenced the exchange offer. The exchange offer is subject to the terms and conditions described in this prospectus/offer to exchange. Under Bermuda law, if Validus acquires at least 90% of the IPC common shares which it is seeking to acquire in the exchange offer, Validus will have the right to acquire the remaining IPC common shares on the same terms in the second-step acquisition. Validus believes that it would be able to complete the exchange offer in June 2009, promptly following termination of the Max amalgamation agreement (and subject to the satisfaction or waiver of the other conditions to the exchange offer), based on the following. The expiration time of the exchange offer will be June 26, 2009, unless extended. As a result, if the conditions of the exchange offer are satisfied or waived at the expiration time of the exchange offer, Validus would be able to acquire all of the IPC common shares that are validly tendered pursuant to the exchange offer.

 

Third, Validus intends to resubmit its application to the Supreme Court of Bermuda to approve a “scheme of arrangement” under Part VII of the Companies Act, which we refer to as “the Validus scheme of arrangement,” pursuant to which Validus would acquire all of the issued and outstanding IPC common shares on the same economic terms as in the exchange offer and the Validus amalgamation offer. In order to implement the Validus scheme of arrangement, the IPC shareholders must approve the Validus scheme of arrangement at a meeting ordered by the Supreme Court of Bermuda, which we refer to as the “court-ordered IPC meeting,” IPC must separately approve the Validus scheme of arrangement and the Validus scheme of arrangement must be sanctioned by the Supreme Court of Bermuda. The Validus scheme of arrangement must be approved by a majority in number of the holders of IPC common shares voting at the court-ordered IPC meeting, whether in person or by proxy, representing 75% or more in value of the IPC common shares voting at the court-ordered IPC meeting, whether in person or by proxy. If the IPC shareholders approve the Validus scheme of arrangement at the court-ordered IPC meeting, the separate approval of IPC to the Validus scheme of arrangement can be provided by either (i) the IPC board of directors voluntarily complying with the will of the IPC shareholders as expressed at the court-ordered IPC meeting, or (ii) the shareholders of IPC approving resolutions at a special general meeting of IPC, which we refer to as the “IPC special general meeting,” including resolutions for IPC to approve and to be bound by the Validus scheme of arrangement and to terminate the Max amalgamation agreement. Following IPC shareholder approval at both the court-ordered IPC meeting and the IPC special general meeting, the satisfaction or, where relevant, waiver of the other conditions to the effectiveness of the Validus scheme of arrangement and the granting of a court order from the Supreme Court of Bermuda sanctioning the Validus scheme of arrangement, a copy of the court order sanctioning the Validus scheme of arrangement will be delivered to the Bermuda Registrar of Companies, at which time the Validus scheme of arrangement will be effective. In a decision rendered on May 29, 2009, the Supreme Court of Bermuda dismissed Validus’ application to convene a meeting of IPC shareholders to consider the Validus scheme of arrangement but determined that it has jurisdiction to sanction the Validus scheme of arrangement without approval of the IPC board of directors. However, the Court determined not to exercise its discretion to order the court-ordered IPC meeting in advance of the vote on the proposed Max amalgamation at the IPC annual general meeting and evidence of IPC shareholder support for the Validus scheme of arrangement and there can be no assurance that the Court will on a subsequent application by Validus exercise its discretion to convene such a meeting. Validus believes that, under the Validus scheme of arrangement, it would be able to close the contemplated acquisition in July 2009 based on the assumptions that: (1) the Supreme Court of Bermuda will be able to

accommodate the preferred hearings schedule and meeting dates and other procedural matters and exercises its discretion to convene the court-ordered IPC meeting; (2) IPC shareholders holding at least one-tenth of the issued IPC common shares have requisitioned the IPC special general meeting to be held in July 2009; and (3) the IPC directors, following the rejection of the Max amalgamation agreement, or the IPC shareholders, convene the IPC special general meeting, allowing it to be held in July 2009.

 

The Validus amalgamation offer, the exchange offer and the Validus scheme of arrangement are alternative methods for Validus to acquire all of the issued and outstanding IPC common shares on the same economic terms. Ultimately, only one of these transaction structures can be pursued to completion. Validus intends to seek to acquire all IPC common shares by whichever method Validus determines is most effective and efficient.

 

The exchange offer does not constitute a solicitation of proxies in connection with the Validus scheme of arrangement or the Validus amalgamation offer. Any such solicitation will be made only pursuant to separate proxy materials complying with the requirements of the rules and regulations of the SEC. Such materials will contain, among other things, a summary of all material terms of the transactions to which such proxy statements relate. Validus advises shareholders to read any such proxy statements applicable to them because they contain important information. Please see the section of this prospectus/offer to exchange entitled “Solicitation of Proxies.”

 

Has IPC’s board of directors made a recommendation concerning the exchange offer?

 

On May 14, 2009, IPC filed a Solicitation/Recommendation Statement on Schedule 14D-9 reporting that IPC’s board had met on May 13, 2009 and determined to recommend that IPC shareholders reject the exchange offer and not tender their IPC common shares to us. On May 21, 2009, IPC filed an amendment to its Solicitation/Recommendation Statement on Schedule 14D-9 reporting that IPC’s board had met on May 20, 2009 and stating the IPC board of directors’ recommendation that IPC shareholders reject the May 18, 2009 terms of the exchange offer and not tender their IPC common shares to Validus pursuant to the exchange offer. On June 9, 2009, IPC filed an amendment to its Solicitation/Recommendation Statement on Schedule 14D-9 reporting that IPC’s board had met on June 9, 2009 and stating the IPC board of directors’ recommendation that IPC shareholders reject the June 8, 2009 terms of the exchange offer and not tender their IPC common shares to Validus pursuant to the exchange offer.

 

Do I need to grant proxies to Validus in connection with any of the potential proxy solicitations described above if I wish to accept the exchange offer? Do I have to vote against the proposed Max amalgamation?

 

No. Your ability to tender your IPC common shares in the exchange offer is not conditioned on IPC shareholders granting proxies to Validus in connection with any of its potential proxy solicitations discussed above. However, a tendering shareholder will irrevocably appoint designees of Validus as such shareholder’s agents, attorneys-in-fact and proxies, effective as of and only to the extent that Validus accepts such tendered IPC common shares for exchange. Until such time as Validus accepts such tendered IPC common shares for exchange, IPC shareholders will be able to vote on any alternative proposal.

 

You may validly tender your IPC common shares in the exchange offer, regardless of whether or how you vote on the proposed Max amalgamation. However, assuming a quorum is present at the annual general meeting of IPC shareholders, at which meeting IPC shareholders will vote upon the proposed Max amalgamation, a majority of votes cast at the annual general meeting must vote against the proposed Max amalgamation and a successful vote against the proposed Max amalgamation would help permit this to occur, as the exchange offer is conditioned on the termination of the Max amalgamation agreement (and such a vote would give IPC the right, but not the obligation, to terminate the Max amalgamation agreement).

 

Do I have to vote at any meeting to approve the exchange offer or the second-step acquisition?

 

No. The minimum tender condition will be satisfied only if Validus (or a wholly-owned subsidiary of Validus) acquires 90% of the then-outstanding number of IPC common shares on a fully-diluted basis (excluding any IPC common shares owned by Validus, its subsidiaries or IPC). Once the exchange offer is completed, Bermuda law does not require any additional shareholder vote or the approval of IPC’s board of directors for us to complete the second-step acquisition pursuant to Section 102 or Section 103 of the Companies Act.

What will the composition of the board of directors of IPC and Validus be following the exchange offer and the second-step acquisition?

 

Validus currently intends to replace IPC’s existing board of directors following the second-step acquisition and short-form amalgamation. Upon completion of the exchange offer and the second-step acquisition, Validus’ board of directors would consist of the directors serving on the board of directors of Validus before the completion of the exchange offer and the second-step acquisition; however, Validus has publicly expressed to the IPC directors that if they desire to participate in the leadership of Validus after completion of the exchange offer and the second-step acquisition, Validus would consider that.

 

Will I be taxed on the Validus common shares I receive?

 

The exchange offer, second-step acquisition and short-form amalgamation are intended to constitute a single integrated transaction that qualifies as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which we refer to as the “Code.” Assuming it does so qualify, U.S. holders of IPC common shares will generally recognize gain (but not loss) in an amount equal to the lesser of (i) the amount of cash received by such U.S. holder and (ii) the excess, if any, of (a) the sum of the cash and the fair market value of the Validus common shares received by such U.S. holder, over (b) the U.S. holder’s tax basis in the IPC common shares exchanged pursuant to the exchange offer and second-step acquisition. Subject to the passive foreign investment company rules or the potential application of Section 1248 of the Code, any gain recognized upon the exchange generally will be capital gain, unless the receipt of cash by a U.S. holder has the effect of the distribution of a dividend for U.S. federal income tax purposes. For more information, please see the section of this prospectus/offer to exchange under the caption “Material U.S. Federal Income Tax Consequences.”

 

Tax matters are complicated and the tax consequences of the transaction to you will depend upon the facts of your particular circumstances. Because individual circumstances may differ, Validus urges you to consult with your own tax advisor as to the specific tax consequences of the exchange offer, second-step acquisition and short-form amalgamation to you, including the applicability of U.S. federal, state, local, non-U.S. and other tax laws.

 

Will I have to pay any fee or commission to exchange IPC common shares?

 

If you are the record owner of your IPC common shares and you tender your IPC common shares in the exchange offer, you will not have to pay any brokerage fees, commissions or similar expenses. If you own your IPC common shares through a broker, dealer, commercial bank, trust company or other nominee and your broker, dealer, commercial bank, trust company or other nominee tenders your IPC common shares on your behalf, your broker, dealer, commercial bank, trust company or other nominee may charge a fee for doing so. You should consult your broker, dealer, commercial bank, trust company or other nominee to determine whether any charges will apply.

 

Is Validus’ financial condition relevant to my decision to tender IPC common shares in the exchange offer?

 

Yes. Validus’ financial condition is relevant to your decision to tender your IPC common shares because the consideration you will receive if your IPC common shares are exchanged in the exchange offer will consist of a combination of Validus common shares and cash. You should therefore consider Validus’ financial condition before you decide to become one of Validus’ shareholders through the exchange offer. You also should consider the likely effect that Validus’ acquisition of IPC will have on Validus’ financial condition. This prospectus/offer to exchange contains financial information regarding Validus and IPC, as well as pro forma financial information (which does not reflect any of our expected synergies) for the acquisition of all of the issued and outstanding IPC common shares by Validus, all of which we encourage you to review.

 

Does Validus have the financial resources to complete the exchange offer and the second-step acquisition?

 

The exchange offer consideration will consist of a combination of Validus common shares and cash (less any applicable withholding taxes and without interest), including cash paid in lieu of any fractional Validus common shares to which any IPC shareholder may be entitled. The exchange offer is not subject to a financing condition.

Validus expects to have sufficient cash and cash equivalents on hand to complete the transactions contemplated by the exchange offer and the second-step acquisition, including to pay the cash portion of the offer consideration and any cash that may be required to be paid in respect of dissenter’s or appraisal rights and to pay fees, expenses and other related amounts.

 

The estimated amount of cash required is based on Validus’ due diligence review of IPC’s publicly available information to date and is subject to change. For a further discussion of the risks relating to Validus’ limited due diligence review, please see the section of this prospectus/offer to exchange entitled “Risk Factors — Risk Factors Relating to the Exchange Offer and the Second-Step Acquisition.”

 

What percentage of Validus common shares will former holders of IPC common shares own after the exchange offer?

 

Based on Validus’ and IPC’s respective capitalizations as of March 31, 2009 and the exchange ratio of 1.1234, Validus estimates that if all IPC common shares are exchanged pursuant to the exchange offer and/or the second-step acquisition, former IPC shareholders would own, in the aggregate, approximately 41.3% of the issued and outstanding Validus common shares and non-voting common shares, par value $0.175 per share, of Validus, which we refer to as “Validus non-voting common shares,” on a fully-diluted basis. For a detailed discussion of the assumptions on which this estimate is based, please see the section of this prospectus/offer to exchange entitled “The Exchange Offer — Ownership of Validus After the Exchange Offer.”

 

When does the exchange offer expire?

 

The exchange offer is scheduled to expire at 5:00 p.m., New York City time (6:00 p.m., Atlantic Time), on June 26, 2009, which is the expiration time of the exchange offer, unless further extended by Validus. When we make reference to the “expiration time of the exchange offer” anywhere in this prospectus/offer to exchange, this is the time to which we are referring, including when applicable, any extension period that may apply. For more information, please see the section of this prospectus/offer to exchange entitled “The Exchange Offer — Extension, Termination and Amendment.”

 

Can the exchange offer be extended and, if so, under what circumstances?

 

Validus may, in its sole discretion, extend the exchange offer at any time or from time to time until the expiration time of the exchange offer. For instance, the exchange offer may be extended if any of the conditions specified in “The Exchange Offer — Conditions of the Exchange Offer” are not satisfied prior to the scheduled expiration time of the exchange offer.

 

Validus may also elect to provide a “subsequent offering period” for the exchange offer. A subsequent offering period would not be an extension of the exchange offer. Rather, a subsequent offering period would be an additional period of time, beginning after Validus has accepted for exchange all IPC common shares tendered during the exchange offer, during which shareholders who did not tender their shares in the exchange offer may tender their shares and receive the same consideration provided in the exchange offer. Validus does not currently intend to include a subsequent offering period, although it reserves the right to do so.

 

The exchange offer is conditioned upon, among other things, the termination of the Max amalgamation agreement, the approval by our shareholders of the issuance of Validus common shares to be issued as a portion of the offer consideration in exchange for IPC common shares in the exchange offer and the second-step acquisition, tender without withdrawal of at least 90% of the then-outstanding number of IPC common shares on a fully-diluted basis (excluding any IPC common shares owned by Validus, its subsidiaries or IPC), no material adverse effect having occurred with respect to IPC and its subsidiaries, IPC and its subsidiaries continuing to operate in the ordinary course of business consistent with past practice and the registration statement of which this prospectus/offer to exchange is a part becoming effective. The expiration time of the exchange offer may also be subject to multiple extensions and any decision to extend the exchange offer, and if so, for how long, will be made at such time. Any decision to extend the exchange offer will be made public by an announcement regarding such extension as described in the section of this prospectus/offer to exchange entitled “The Exchange Offer — Extension, Termination and Amendment.”

How do I tender my IPC common shares?

 

To tender your IPC common shares into the exchange offer, you must deliver the certificates representing your IPC common shares, together with a completed revised pink letter of transmittal and any other documents required by the revised pink letter of transmittal, to BNY Mellon Shareowner Services, the exchange agent for the exchange offer, not later than the expiration time of the exchange offer. The revised pink letter of transmittal is enclosed with this prospectus/offer to exchange.

 

If your IPC common shares are held in “street name” (i.e., through a broker, dealer, commercial bank, trust company or other nominee), your IPC common shares can be tendered by your nominee by book-entry transfer through The Depository Trust Company.

 

If you are unable to deliver any required document or instrument to the exchange agent by the expiration time of the exchange offer, you may have a limited amount of additional time by having a broker, a bank or other fiduciary that is an eligible guarantor institution guarantee that the missing items will be received by the exchange agent by using the enclosed yellow notice of guaranteed delivery circulated with this prospectus/offer to exchange, which we refer to as the “revised yellow notice of guaranteed delivery,” or the green notice of guaranteed delivery previously circulated with the prospectus/offer to exchange dated May 13, 2009, which we refer to as the “original green notice of guaranteed delivery.” For the tender to be valid, however, the exchange agent must receive the missing items within three NASDAQ Global Select Market trading days after the date of execution of such notice of guaranteed delivery. In all cases, an exchange of tendered shares will be made only after timely receipt by the exchange agent of certificates for such shares (or of a confirmation of a book-entry transfer of such shares) and a properly completed and duly executed revised pink letter of transmittal and any other required documents.

 

Tendering stockholders may continue to use the original blue letter of transmittal and the original green notice of guaranteed delivery, or they may use the revised pink letter of transmittal and the revised yellow notice of guaranteed delivery. Stockholders using the original blue letter of transmittal to tender their IPC common shares will nevertheless be deemed to be tendering pursuant to the terms and conditions contained in this prospectus/offer to exchange and the enclosed revised pink letter of transmittal and will receive 1.1234 Validus common shares and $3.75 in cash, less any applicable withholding taxes and without interest. For a complete discussion on the procedures for tendering your IPC common shares, please see the section of this prospectus/offer to exchange entitled “The Exchange Offer — Procedure for Tendering.”

 

Until what time can I withdraw tendered IPC common shares?

 

You may withdraw previously tendered IPC common shares any time prior to the expiration time of the exchange offer, and, if Validus has not accepted your IPC common shares for exchange by the expiration time of the exchange offer, at any time following 60 days from commencement of the exchange offer. IPC common shares tendered during the subsequent offering period, if one is provided, may not be withdrawn. For a complete discussion on the procedures for withdrawing your IPC common shares, please see the section of this prospectus/offer to exchange entitled “The Exchange Offer — Withdrawal Rights.”

 

How do I withdraw previously tendered IPC common shares?

 

To withdraw previously tendered IPC common shares, you must deliver a written or facsimile notice of withdrawal with the required information to the exchange agent while you still have the right to withdraw. If you tendered shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct the broker, dealer, commercial bank, trust company or other nominee to arrange for the withdrawal of your IPC common shares. For a complete discussion on the procedures for withdrawing your IPC common shares, please see the section of this prospectus/offer to exchange entitled “The Exchange Offer — Withdrawal Rights.”

 

When and how will I receive the exchange offer consideration in exchange for my tendered IPC common shares?

 

Validus will exchange all validly tendered and not properly withdrawn IPC common shares promptly after the expiration time of the exchange offer, subject to the terms thereof and the satisfaction or waiver of the conditions to

the exchange offer, as set forth in “The Exchange Offer — Conditions of the Exchange Offer.” Validus will deliver the consideration for your validly tendered and not properly withdrawn IPC common shares by depositing the consideration therefor with the exchange agent, which will act as your agent for the purpose of receiving the exchange offer consideration from Validus and transmitting such consideration to you. In all cases, an exchange of tendered IPC common shares will be made only after timely receipt by the exchange agent of certificates for such shares (or of a confirmation of a book-entry transfer of such shares as described in “The Exchange Offer — Procedure for Tendering”) and a properly completed and duly executed revised pink letter of transmittal or original blue letter of transmittal and any other required documents.

 

Will IPC continue as a public company following the exchange offer?

 

If the second-step acquisition occurs, IPC will become a wholly-owned subsidiary of Validus and will no longer be publicly owned. Even if the second-step acquisition does not occur, if Validus exchanges all IPC common shares which have been tendered, there may be so few remaining shareholders and publicly-held shares that IPC common shares will no longer be eligible to be traded through the NASDAQ Global Select Market, the Bermuda Stock Exchange or any other securities market, there may not be a public trading market for such shares, and IPC may cease making filings with the SEC or otherwise cease being required to comply with applicable law and SEC rules relating to publicly-held companies. Please see the section of this prospectus/offer to exchange entitled “The Exchange Offer — Plans for IPC” and “The Exchange Offer — Effect of the Exchange Offer on the Market for IPC Common Shares; NASDAQ and Bermuda Stock Exchange Listing; Registration Under the Exchange Act; Margin Regulations.”

 

Are dissenters’ or appraisal rights available in either the exchange offer and/or the second-step acquisition?

 

No dissenters’ or appraisal rights are available in connection with the exchange offer. However, if the second-step acquisition is subsequently consummated between Validus and IPC, IPC shareholders who have not tendered their IPC common shares in the exchange offer will have certain rights under Section 102 and Section 103 of the Companies Act to dissent from the second-step acquisition and, in the case of Section 103, to demand appraisal. Please see the section of this prospectus/offer to exchange entitled “The Exchange Offer — Appraisal/Dissenters’ Rights.”

 

What is the market value of my IPC common shares as of a recent date?

 

On March 30, 2009, the last trading day before Validus made the initial Validus offer, the closing price of an IPC common share was $25.41. On June 11, 2009, the last practicable date prior to the filing of this prospectus/offer to exchange, the closing price of an IPC common share was $27.45. IPC shareholders are encouraged to obtain a recent quotation for IPC common shares before deciding whether or not to tender such shares.

 

Why does the cover page state that the exchange offer is subject to change and that the registration statement filed with the SEC is not yet effective? Does this mean that the exchange offer has not commenced?

 

No. Completion of this preliminary prospectus/offer to exchange and effectiveness of the registration statement are not necessary for the exchange offer to commence. Validus commenced the exchange offer on May 12, 2009. We cannot, however, accept for exchange any IPC common shares tendered in the exchange offer or exchange any IPC common shares until the registration statement is declared effective by the SEC and the other conditions to the exchange offer have been satisfied or waived.

 

Where can I find more information on Validus and IPC?

 

You can find more information about Validus and IPC from various sources described in the section of this prospectus/offer to exchange entitled “Where You Can Find More Information.”

Who can I contact with any additional questions about the exchange offer?

 

You can call the information agent or the dealer manager for the exchange offer.

 

The information agent for the exchange offer is:

 

 

199 Water Street, 26th Floor

New York, New York 10038

Banks and Brokerage Firms, Please Call: (212) 440-9800

All Others Call Toll-Free: at (800) 213-0317

Email: validusIPC@georgeson.com

 

The dealer manager for the exchange offer is:

 

 

Greenhill & Co., LLC

300 Park Avenue

New York, New York 10022

Call Toll-Free: (888) 504-7336

 

SUMMARY OF THE EXCHANGE OFFER

The Companies (See page 40)

The Exchange Offer (See pages 68 and 84)

Reasons for the Exchange Offer (See page 64)

Conditions of the Exchange Offer (See page 90)

	•	IPC shareholders shall have validly tendered and not withdrawn prior to the expiration time of the exchange offer at least that number of IPC common shares that shall constitute 90% of the then-outstanding number of IPC common shares on a fully-diluted basis (excluding any IPC common shares owned by Validus, its subsidiaries or IPC).
	•	The Max amalgamation agreement shall have been validly terminated, and Validus shall reasonably believe that IPC could not have any liability, and Max shall not have asserted any claim of liability or breach against IPC in connection with the Max amalgamation agreement other than with respect to the possible payment of the Max termination fee.
	•	The registration statement of which this prospectus/offer to exchange is a part shall have become effective under the Securities Act, no stop order suspending the effectiveness of the registration statement shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC, and Validus shall have received all necessary state securities law or “blue sky” authorizations.
	•	The shareholders of Validus shall have approved the issuance of the Validus common shares pursuant to the exchange offer and the second-step acquisition as required under the rules of the NYSE. All of the Validus

		officers, directors and those shareholders which Validus refers to as its “qualified sponsors” (please see the section of this prospectus/offer to exchange entitled “The Exchange Offer — Conditions of the Exchange Offer”), in each case, who own Validus common shares have indicated that they intend to vote the Validus common shares beneficially owned by them in favor of such approvals. As of April 30, 2009, these persons and entities beneficially owned 42.4% of the voting interests relating to the Validus common shares.

	•	The Validus common shares to be issued to IPC shareholders in exchange for IPC common shares in the exchange offer and the second-step acquisition shall have been authorized for listing on the NYSE, subject to official notice of issuance.
	•	There shall be no threatened or pending litigation, suit, claim, action, proceeding or investigation before any governmental authority that, in the judgment of Validus, is reasonably likely to, directly or indirectly, restrain or prohibit (or which alleges a violation of law in connection with) the exchange offer or is reasonably likely to prohibit or limit the full rights of ownership of IPC common shares by Validus or any of its affiliates.
	•	Since December 31, 2008, there shall not have been any material adverse effect on IPC and its subsidiaries, taken as a whole. A more than 50% decline in IPC’s book value or a more than 20% decline in IPC’s book value relative to Validus’ book value shall be deemed to have a material adverse effect on IPC.
	•	Each of IPC and its subsidiaries shall have carried on their respective businesses in the ordinary course consistent with past practice at all times on or after the date of this prospectus/offer to exchange and prior to the expiration time of the exchange offer.
	•	All amendments or waivers under Validus’ credit facilities necessary to consummate the exchange offer, the second-step acquisition and the other transactions contemplated by this prospectus/offer to exchange shall be in full force and effect.

Ownership of Validus After the Exchange Offer (See page 76)

Comparative Market Price and Dividend Information (See page 32)

										Implied Value Per IPC
		Validus Common Shares				IPC Common Shares				Common Share in the
		Closing Price				Closing Price				Exchange Offer
March 30, 2009		$	24.91			$	25.41			$	31.73
June 11, 2009		$	23.65			$	27.45			$	30.32

 

Interest of Executive Officers and Directors of Validus in the Exchange Offer (See page 97)

 

Appraisal/Dissenters’ Rights (See page 86)

 

Material U.S. Federal Income Tax Consequences (See page 77)

 

Accounting Treatment (See page 98)

 

Regulatory Approval and Status (See page 95)

Listing of Validus Common Shares to be Issued Pursuant to the Exchange Offer and the Second-Step Acquisition (See page 90)

Comparison of Shareholders’ Rights (See page 100)

Expiration Time of the Exchange Offer (See page 69)

Extension, Termination and Amendment (See page 69)

	•	to extend, for any reason, the period of time during which the exchange offer is open;

	•	to delay acceptance for exchange of, or exchange of, any IPC common shares in order to comply in whole or in part with applicable law;
	•	to terminate the exchange offer without accepting for exchange, or exchanging, any IPC common shares if any of the individually subheaded conditions referred to in the section of this prospectus/offer to exchange entitled “The Exchange Offer — Conditions of the Exchange Offer” have not been satisfied immediately prior to the expiration time of the exchange offer or if any event specified in the section of this prospectus/offer to exchange entitled “The Exchange Offer — Conditions of the Exchange Offer” under the subheading “Other Conditions” has occurred;
	•	to amend or terminate the exchange offer without accepting for exchange, or exchanging, any IPC common shares if Validus or any of its affiliates enters into a definitive agreement or announces an agreement in principle with IPC providing for an amalgamation, scheme of arrangement or other business combination or transaction with or involving IPC or any of its subsidiaries, or the purchase or exchange of securities or assets of IPC or any of its subsidiaries, or the Supreme Court of Bermuda sanctions a scheme of arrangement between IPC and its shareholders whereby Validus or any of its subsidiaries acquires securities of IPC, or Validus and IPC reach any other agreement or understanding, in either case, pursuant to which it is agreed or provided that the exchange offer will be terminated; and
	•	to amend the exchange offer or waive any conditions to the exchange offer;

 

Procedure for Tendering Shares (See page 72)

 

Withdrawal Rights (See page 75)

 

Exchange of IPC Common Shares; Delivery of Offer Consideration (See page 71)

 

Risk Factors (See page 35)

 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF VALIDUS

		Three Months Ended								Year Ended				Year Ended				Year Ended				Period Ended
		March 31,								December 31,				December 31,				December 31,				December 31,
		2009				2008				2008				2007				2006				2005
		(Dollars in thousands, except share and per share amounts)
Revenues
Gross premiums written		$	609,892			$	521,594			$	1,362,484			$	988,637			$	540,789			$	—
Reinsurance premiums ceded			(72,512	)			(84,900	)			(124,160	)			(70,210	)			(63,696	)			—
Net premiums written			537,380				436,694				1,238,324				918,427				477,093				—
Change in unearned premiums			(218,621	)			(144,830	)			18,194				(60,348	)			(170,579	)			—
Net premiums earned			318,759				291,864				1,256,518				858,079				306,514				—
Net investment income			26,772				36,043				139,528				112,324				58,021				2,032
Realized gain on repurchase of debentures			—				—				8,752				—				—				—
Net realized gains (losses) on investments			(23,421	)			7,744				(1,591	)			1,608				(1,102	)			39
Net unrealized gains on investments(2)			22,153				(14,977	)			(79,707	)			12,364				—				—
Other income			757				935				5,264				3,301				—				—
Foreign exchange gains (losses)			(4,200	)			8,179				(49,397	)			6,696				2,157				—
Total revenues			340,820				329,788				1,279,367				994,372				365,590				2,071
Expenses
Losses and loss expenses			131,834				140,024				772,154				283,993				91,323				—
Policy acquisition costs			61,449				56,701				234,951				134,277				36,072				—
General and administrative expenses(1)			38,079				37,107				123,948				100,765				38,354				2,367
Share compensation expenses			7,354				6,535				27,097				16,189				7,878				290
Finance expenses			7,723				21,517				57,318				51,754				8,789				—
Fair value of warrants issued			—				—				—				2,893				77				49,122
Total expenses			246,439				261,884				1,215,468				589,871				182,493				51,779
Net income before taxes			94,381				67,904				63,899				404,501				183,097				(49,708	)
Taxes			526				(1,429	)			(10,788	)			(1,505	)			—				—
Net income (loss)			94,907				66,475				53,111				402,996				183,097				(49,708	)
Comprehensive income (loss)
Unrealized gains arising during the period(2)			—				—				—				—				(332	)			144
Foreign currency translation adjustments			(196	)			67				(7,809	)			(49	)			—				—
Adjustment for reclassification of losses realized in income			—				—				—				—				1,102				(39	)
Comprehensive income (loss)		$	94,711			$	66,542			$	45,302			$	402,947			$	183,867			$	(49,603	)
Earnings per share(3)
Weighted average number of common shares and common share equivalents outstanding
Basic			75,744,577				74,209,371				74,677,903				65,068,093				58,477,130				58,423,174
Diluted			79,102,643				78,329,727				75,819,413				67,786,673				58,874,567				58,423,174
Basic earnings per share		$	1.23			$	0.87			$	0.62			$	6.19			$	3.13			$	(0.85	)
Diluted earnings per share		$	1.20			$	0.85			$	0.61			$	5.95			$	3.11			$	(0.85	)
Cash dividends per share		$	0.20			$	0.20			$	0.80			$	—			$	—			$	—
Selected financial ratios
Losses and loss expenses ratio(4)			41.4	%			48.0	%			61.5	%			33.1	%			29.8	%			—
Policy acquisition cost ratio(5)			19.3	%			19.4	%			18.7	%			15.6	%			11.8	%			—
General and administrative expense ratio(6)			14.3	%			15.0	%			12.0	%			13.3	%			15.1	%			—
Expense ratio(7)			33.6	%			34.4	%			30.7	%			28.9	%			26.9	%			—
Combined ratio(8)			75.0	%			82.4	%			92.2	%			62.0	%			56.7	%			—
Annualized return on average equity(9)			19.2	%			13.5	%			2.7	%			26.9	%			17.0	%			NM

		As of				As of				As of				As of				As of
		March 31,				March 31,				December 31,				December 31,				December 31,
		2009				2008				2008				2007				2006
		(Dollars in thousands, except share and per share amounts)
Summary Balance Sheet Data:
Investments at fair value		$	2,926,859			$	2,893,595			$	2,831,537			$	2,662,021			$	1,376,387
Cash and cash equivalents			535,798				347,347				449,848				444,698				63,643
Total assets			4,762,798				4,535,638				4,322,480				4,144,224				1,646,423
Reserve for losses and loss expenses			1,318,732				977,236				1,305,303				926,117				77,363
Unearned premiums			795,233				750,257				539,450				557,344				178,824
Junior subordinated deferrable debentures			304,300				350,000				304,300				350,000				150,000
Total liabilities			2,739,812				2,544,980				2,383,746				2,209,424				453,900
Total shareholders’ equity			2,022,986				1,990,658				1,938,734				1,934,800				1,192,523
Book value per common share(10)			26.68				26.82				25.64				26.08				20.39
Diluted book value per common share(11)			24.65				24.43				23.78				24.00				19.73

NM		— Not meaningful

(1)		General and administrative expenses for the years ended December 31, 2007 and 2006 include $4,000,000 and $1,000,000 respectively, related to our advisory agreement with Aquiline Capital Partners, LLC, which, together with its related companies, we refer to as “Aquiline.” Our advisory agreement with Aquiline terminated upon completion of our initial public offering, in connection with which Validus recorded general and administrative expense of $3,000,000 in the year ended December 31, 2007.
(2)		Validus adopted FAS 157 and FAS 159 as of January 1, 2007 and elected the fair value option on all securities previously accounted for as available-for-sale. Unrealized gains and losses on available-for-sale investments at December 31, 2006 of $875,000, previously included in accumulated other comprehensive income, were treated as a cumulative-effect adjustment as of January 1, 2007. The cumulative-effect adjustment transferred the balance of unrealized gains and losses from accumulated other comprehensive income to retained earnings and had no impact on the results of operations for the annual or interim periods beginning January 1, 2007. Validus’ investments were accounted for as trading for the annual or interim periods beginning January 1, 2007 and as such all unrealized gains and losses are included in net income.
(3)		FAS 123(R) requires that any unrecognized stock-based compensation expense that will be recorded in future periods be included as proceeds for purposes of treasury stock repurchases, which is applied against the unvested restricted shares balance. On March 1, 2007 we effected a 1.75 for 1 reverse stock split of our outstanding common shares. The stock split does not affect our financial statements other than to the extent it decreases the number of outstanding shares and correspondingly increases per share information for all periods presented. The share consolidation has been reflected retroactively in these financial statements.
(4)		The losses and loss expense ratio is calculated by dividing losses and loss expenses by net premiums earned.
(5)		The policy acquisition cost ratio is calculated by dividing policy acquisition costs by net premiums earned.
(6)		The general and administrative expense ratio is calculated by dividing the sum of general and administrative expenses and share compensation expenses by net premiums earned. The general and administrative expense ratio for the year ended December 31, 2007 is calculated by dividing the total of general and administrative expenses plus share compensation expenses less the $3,000,000 termination fee payable to Aquiline by net premiums earned.
(7)		The expense ratio is calculated by combining the policy acquisition cost ratio and the general and administrative expense ratio.

(8)		The combined ratio is calculated by combining the losses and loss expense ratio, the policy acquisition cost ratio and the general and administrative expense ratio.
(9)		Annualized return on average equity is calculated by dividing the net income for the period by the average shareholders’ equity during the period. Annual average shareholders’ equity is the average of the beginning, ending and intervening quarter-end shareholders’ equity balances.
(10)		Book value per common share is defined as total shareholders’ equity divided by the number of common shares outstanding as at the end of the period, giving no effect to dilutive securities.
(11)		Diluted book value per common share is calculated based on total shareholders’ equity plus the assumed proceeds from the exercise of outstanding options and warrants, divided by the sum of common shares, unvested restricted shares, options and warrants outstanding (assuming their exercise). Diluted book value per common share is a Non-GAAP financial measure as described under Item 7, “Management’s Discussion and Analysis of Financial condition and Results of Operations — Financial Measures,” in the Validus 10-K.

 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF IPC

		Three months ended March 31,								Year Ended December 31,
		2009				2008				2008				2007				2006				2005				2004
		(Dollars in thousands, except share and per share amounts)
Statement of Income (Loss) Data:
Gross premiums written		$	234,610			$	197,875			$	403,395			$	404,096			$	429,851			$	472,387			$	378,409
Net premiums earned			98,708				89,697				387,367				391,385				397,132				452,522				354,882
Net investment income			21,866				23,874				94,105				121,842				109,659				71,757				51,220
Net (losses) gains on investments			(35,572	)			(6,020	)			(168,208	)			67,555				12,085				(10,556	)			5,946
Other income			7				26				65				1,086				3,557				5,234				4,296
Net loss and loss adjustment expenses incurred			39,109				5,324				155,632				124,923				58,505				1,072,662				215,608
Net acquisition costs			9,838				8,674				36,429				39,856				37,542				39,249				37,682
General and administrative expenses			24,281				7,079				26,314				30,510				34,436				27,466				23,151
Interest expense			383				—				2,659				—				—				—				—
Net foreign exchange loss (gain)			3,146				(303	)			1,848				1,167				(2,635	)			2,979				1,290
Net income (loss)		$	8,252			$	86,803			$	90,447			$	385,412			$	394,585			$	(623,399	)		$	138,613
Preferred dividend			—				4,234				14,939				17,128				17,176				2,664				—
Net income (loss), available to common shareholders		$	8,252			$	82,569			$	75,508			$	368,284			$	377,409			$	(626,063	)		$	138,613
Net income (loss) per common share(1)		$	0.15			$	1.31			$	1.45			$	5.53			$	5.54			$	(12.30	)		$	2.87
Weighted average shares outstanding(1)			55,916,256				66,182,883				59,301,939				69,728,229				71,212,287				50,901,296				48,376,865
Cash dividend per common share		$	0.22			$	0.22			$	0.88			$	0.80			$	0.64			$	0.88			$	0.88
Other Data:
Loss and loss adjustment expense ratio(2)			39.6	%			5.8	%			40.2	%			31.9	%			14.7	%			237.0	%			60.8	%
Expense ratio(2)			34.6	%			17.1	%			16.2	%			18.0	%			18.1	%			14.8	%			17.1	%
Combined ratio(2)			74.2	%			22.9	%			56.4	%			49.9	%			32.8	%			251.8	%			77.9	%
Return on average equity(3)			1.8	%			15.5	%			4.2	%			20.1	%			24.0	%			(38.0	)%			8.6	%
Balance Sheet Data (at end of period):
Total cash and investments		$	2,189,966			$	2,475,860			$	2,235,187			$	2,473,244			$	2,485,525			$	2,560,146			$	1,901,094
Reinsurance premiums receivable			199,241				161,474				108,033				91,393				113,811				180,798				85,086
Total assets			2,453,085				2,712,037				2,388,688				2,627,691				2,645,429				2,778,281				2,028,290
Reserve for losses and loss adjustment expenses			354,467				355,276				355,893				395,245				548,627				1,072,056				274,463
Unearned premiums			219,641				181,889				85,473				75,980				80,043				66,311				68,465
Total liabilities			603,611				563,904				537,741				501,946				654,474				1,161,881				359,851
Total shareholders’ equity		$	1,849,474			$	2,148,133			$	1,850,947			$	2,125,745			$	1,990,955			$	1,616,400			$	1,668,439
Diluted book value per common share(4)		$	33.05			$	33.26			$	32.85	(5)		$	32.42			$	27.94			$	22.26			$	34.44

(1)		Net income per common share is calculated upon the weighted average number of common shares outstanding during the relevant year. The weighted average number of shares includes common shares and the dilutive effect of employee stock options and stock grants, using the treasury stock method and convertible preferred shares. The net loss per common share for the year ended December 31, 2005 is calculated on the weighted average number of shares outstanding during the year, excluding the anti-dilutive effect of employee stock options, stock grants and convertible preferred shares. The net income per common share for the year ended December 31, 2008 is calculated on the weighted average number of shares outstanding during the year, excluding the anti-dilutive effect of stock-based compensation and convertible preferred shares.
(2)		The loss and loss adjustment expense ratio is calculated by dividing the net losses and loss expenses incurred by the net premiums earned. The expense ratio is calculated by dividing the sum of acquisition costs and general and administrative expenses by net premiums earned. The combined ratio is the sum of the loss and loss expense ratio and the expense ratio.
(3)		Return on average equity is calculated as the annual net income (loss), available to common shareholders divided by the average of the common shareholders’ equity, which is total shareholders’ equity, excluding convertible preferred shares, on the first and last day of the respective year.
(4)		Diluted book value per common share is calculated as shareholders’ equity divided by the number of common shares outstanding on the balance sheet date, after considering the dilutive effects of stock-based compensation, calculated using the treasury stock method. At December 31, 2008 the average weighted number of shares outstanding, including the dilutive effect of employee stock-based compensation and convertible preferred shares (which were converted on November 15, 2008) using the treasury stock method was 59,301,939.
(5)		IPC reported diluted book value per common share as $33.07 in the IPC 10-K and amended it to $32.85 in an amendment to the IPC/Max S-4 filed with the SEC on April 13, 2009.

 

SELECTED UNAUDITED CONDENSED CONSOLIDATED PRO FORMA
FINANCIAL INFORMATION

		Three Months Ended				Year Ended
		March 31, 2009				December 31, 2008
		(Dollars in thousands, except
		share and per share amounts)
Revenues
Gross premiums written		$	844,237			$	1,765,628
Reinsurance premiums ceded			(75,401)				(130,031	)
Net premiums written			768,836				1,635,597
Change in unearned premiums			(351,369)				8,288
Net premiums earned			417,467				1,643,885
Net investment income			46,348				222,312
Realized gain on repurchase of debentures			—				8,752
Net realized losses on investments			(58,993)				(169,799	)
Net unrealized losses on investments			22,153				(79,707	)
Other income			764				5,329
Foreign exchange losses			(7,346)				(51,245	)
Total revenues			420,393				1,579,527
Expenses
Losses and loss expenses			170,943				927,786
Policy acquisition costs			71,287				271,380
General and administrative expenses			46,071				144,637
Share compensation expenses			9,843				32,722
Finance expenses			8,106				59,977
Total expenses			306,250				1,436,502
Net income before taxes			114,143				143,025
Taxes			526				(10,788	)
Net income		$	114,669			$	132,237

		Three Months Ended				Year Ended
		March 31, 2009				December 31, 2008
		(Dollars in thousands, except
		share and per share amounts)
Comprehensive income (loss)
Foreign currency translation adjustments			(196	)			(7,809	)
Movement in accumulated pension benefit obligation			—				5
Comprehensive income		$	114,473			$	125,290
Earnings per share
Weighted average number of common shares and common share equivalents outstanding
Basic			138,602,185				137,536,627
Diluted			142,577,306				139,295,193
Basic earnings per share		$	0.81			$	0.91
Diluted earnings per share		$	0.80			$	0.90
Selected financial ratios
Losses and loss expenses ratio(1)			40.9	%			56.4	%
Policy acquisition cost ratio(2)			17.1	%			16.5	%
General and administrative expense ratio(3)			13.4	%			10.8	%
Expense ratio(4)			30.5	%			27.3	%
Combined ratio(5)			71.4	%			83.7	%

		As of
		March 31, 2009
		(Dollars in thousands, except
		share and per share amounts)
Summary Balance Sheet Data:
Investments at fair value		$	4,994,755
Cash and cash equivalents		$	369,784
Total assets		$	6,927,440
Reserve for losses and loss expenses		$	1,673,199
Unearned premiums		$	1,014,675
Junior Subordinated Deferrable Debentures		$	304,300
Total liabilities		$	3,343,064
Total shareholders’ equity		$	3,584,376
Book value per common share(6)		$	25.85
Diluted book value per common share(7)		$	24.65

NM		— Not meaningful

(1)		The losses and loss expense ratio is calculated by dividing losses and loss expenses by net premiums earned.
(2)		The policy acquisition cost ratio is calculated by dividing policy acquisition costs by net premiums earned.
(3)		The general and administrative expense ratio is calculated by dividing the sum of general and administrative expenses and share compensation expenses by net premiums earned.
(4)		The expense ratio is calculated by combining the policy acquisition cost ratio and the general and administrative expense ratio.
(5)		The combined ratio is calculated by combining the losses and loss expense ratio, the policy acquisition cost ratio and the general and administrative expense ratio.

(6)		Book value per common share is defined as total shareholders’ equity divided by the number of common shares outstanding as at the end of the period, giving no effect to dilutive securities.
(7)		Diluted book value per common share is calculated based on total shareholders’ equity plus the assumed proceeds from the exercise of outstanding options and warrants, divided by the sum of common shares, unvested restricted shares, options and warrants out-standing (assuming their exercise). Diluted book value per common share is a Non-GAAP financial measure as described under Item 7, “Management’s Discussion and Analysis of Financial condition and Results of Operations — Financial Measures,” in the Validus 10-K.

 

COMPARATIVE PER SHARE DATA

		Per share data for the
		year ended December 31, 2008
										Validus
		Historical				Historical				Pro forma				Equivalent				IPC Max
		Validus				IPC				combined				Per IPC Share(1)				Pro Forma(3)
		(For the year ended December 31, 2008)
Basic earnings per common share		$	0.62			$	1.45			$	0.91			$	1.02			$	(0.72	)
Diluted earnings per common share		$	0.61			$	1.45			$	0.90			$	1.01			$	(0.72	)
Cash dividends declared per common share		$	0.80			$	0.88			$	0.80			$	0.90			$	0.73
Book value per common share		$	25.64			$	33.00			$	25.19			$	32.05	(2)		$	32.88	(5)
Diluted book value per common share		$	23.78			$	32.85	(4)		$	24.06			$	30.78	(2)			NA

		Per share data for the
		three months ended March 31, 2009
										Validus
		Historical				Historical				Pro forma				Equivalent				IPC Max
		Validus				IPC				combined				Per IPC Share(1)				Pro Forma(3)
		(For the three months ended March 31, 2009)
Basic earnings per common share		$	1.23			$	0.15			$	0.81			$	0.91			$	0.82
Diluted earnings per common share		$	1.20			$	0.15			$	0.80			$	0.90			$	0.82
Cash dividends declared per common share		$	0.20			$	0.22			$	0.20			$	0.22			$	0.19
Book value per common share (at period end)		$	26.68			$	33.06			$	25.85			$	32.79	(2)		$	32.93	(5)
Diluted book value per common share		$	24.65			$	32.73			$	24.65			$	31.44	(2)			NA

(1)		Equivalent per share amounts are calculated by multiplying Validus pro forma per share amounts by the exchange offer exchange ratio of 1.1234.

(2)		For purposes of calculating equivalent per IPC share values for book value per common share and diluted book value per common share, the $3.75 per common share cash consideration is added to the equivalent per share amounts.

(3)		Source: IPC/Max Joint Proxy Statement/Prospectus Supplement dated June 4, 2009 at p. S-19.

(4)		IPC reported diluted book value per common share as $33.07 in the IPC 10-K and amended it to $32.85 in an amendment to the IPC/Max S-4 filed with the SEC on April 13, 2009.

(5)		Book value per common share per IPC/Max Joint Proxy Statement/Prospectus Supplement at p. S-19, adjusted by adding $2.50 to reflect the special dividend and post-closing dividend.

 

COMPARATIVE MARKET PRICE AND DIVIDEND INFORMATION

		Validus												IPC
		High				Low				Dividend				High				Low				Dividend
Year ended
December 31, 2009
First Quarter		$	26.30			$	21.25			$	0.20			$	30.25			$	20.89			$	0.22
Second Quarter (through June 11, 2009)		$	24.55			$	21.55				N/A			$	27.93			$	24.55				N/A
December 31, 2008
First Quarter		$	26.22			$	23.00			$	0.20			$	28.25			$	24.82			$	0.22
Second Quarter		$	23.72			$	20.11			$	0.20			$	30.38			$	26.55			$	0.22
Third Quarter		$	24.70			$	20.00			$	0.20			$	33.00			$	26.58			$	0.22
Fourth Quarter		$	26.16			$	14.84			$	0.20			$	29.90			$	19.52			$	0.22
Year ended December 31, 2007
First Quarter			N/A				N/A				N/A			$	31.53			$	27.82			$	0.20
Second Quarter			N/A				N/A				N/A			$	32.53			$	28.57			$	0.20
Third Quarter		$	25.28			$	21.11				N/A			$	33.01			$	24.01			$	0.20
Fourth Quarter		$	26.59			$	24.73				N/A			$	30.13			$	26.87			$	0.20

		Validus common								Equivalent Validus Per
		share close				IPC common share close				Share Amount
March 30, 2009		$	24.91			$	25.41			$	31.73
June 11, 2009		$	23.65			$	27.45			$	30.32

 

RATIO OF EARNINGS TO FIXED CHARGES

		Pro Forma Combined(1)								Validus
		Three Months Ended				Year Ended				Three Months Ended				Year Ended												Period Ended
		March 31,				December 31,				March 31,				December 31,												December 31,
		2009				2008				2009				2008				2007				2006				2005(2)
Ratio of Earnings to Fixed Charges			14.8				3.4				13.0				2.1				8.7				21.7				NM
Ratio of Earnings to Fixed Charges Excluding FAL Costs(3)			15.5				5.3				13.6				3.1				15.7				21.7				NM

(1)		The Pro Forma Combined reflects the acquisition and related adjustments using the pro forma financial information presented pursuant to Article 11 of Regulation S-X. For a discussion of the assumptions and adjustments made in preparation of the pro forma financial information presented in this prospectus/offer to exchange, see the section of this prospectus/offer to exchange entitled “Unaudited Condensed Consolidated Pro Forma Financial Information.”
(2)		Validus commenced underwriting activities on January 1, 2006. There were no earnings from underwriting activities during the period ended December 31, 2005.
(3)		FAL Costs represent both fixed and variable costs paid for financing the Company’s operations at Lloyd’s. The ratio of earnings to fixed charges excluding FAL Costs demonstrates the degree to which the ratio changes if FAL Costs are treated as variable rather than fixed costs.

NM:		Not meaningful