Validus Holdings Ltd. has gone full steam ahead with its hostile bid for IPC Holdings Ltd. - despite the planned merger between Max Capital Group Ltd. and IPC still being in the offing.

Validus announced yesterday that it had started its share exchange offer, which would see IPC shareholders receive 1.2037 Validus shares for each IPC share as per a filing made with the Securities and Exchange Commission (SEC) and which expires on Friday June 26 at 5 p.m.

The offer documents which will be issued to IPC shareholders include a preliminary prospectus/offer to exchange and a letter of transmittal describing the offer and the means for IPC shareholders to tender their shares.

IPC and Max Capital announced in March that IPC would effectively acquire Max in a stock-based deal, but Validus came in with a $1.7 billion stock offer for IPC last month and has been lobbying IPC shareholders to vote against the merger.

IPC shareholders are now set to vote on the amalgamation plan between IPC and Max on June 12.

"The agreement between IPC and Max precludes IPC from engaging in discussions with Validus, which has left us with no choice but to take our offer directly to IPC shareholders," said Ed Noonan, Validus' chairman and CEO.

"We believe IPC shareholders deserve the right to choose our superior offer over the Max transaction and our three-part plan gives them that opportunity."

As announced at the end of last month, Validus' three-part plan included soliciting IPC shareholders to vote against the proposed Max Capital amalgamation, starting the exchange offer for the IPC shares and pursuing a Scheme of Arrangement under Bermuda law, which it filed with the SEC yesterday.

Validus said that contrary to recent IPC assertions, it could complete the acquisition of IPC shares tendered in the offer notwithstanding an IPC bye-law restricting the registration of transfer of share ownership of 10 percent or more as it would continue to be the registered owner, and no registration of transfer for such shares would be required, and added its offer was not dependent on receiving a specified rating from the rating agencies.