NEW YORK (Bloomberg) — Max Capital Group Ltd. chief executive officer Marston Becker said he expects to prevail over rival reinsurance firm Validus Holdings Ltd. in the competition to combine with IPC Holdings Ltd.

Max Capital won't improve on its "unquestionably superior" stock offer that would give IPC shareholders 58 percent of the combined company, Mr. Becker said in an interview. Based on the companies' closing prices March 30, the Validus offer is worth about 14 percent more to IPC shareholders. Under its agreement with IPC, Bermuda-based Max Capital has the right to top any competing bid.

"Why would I sweeten an offer that's already the more reasonable offer?" Mr. Becker said. "Our deal on the table offers more value, offers more hard assets and it offers true diversification. Both of our companies have done significant due diligence on the other, and now Validus is trying to get them to accept a stock they've never diligenced."

This week's all-stock offer from Validus, equivalent to $29.98 a share or 18 percent more than IPC's March 30 closing price, has raised the prospect of a bidding war among Bermuda-based reinsurance firms, which are weighing mergers to diversify their operations and gain scale. Billionaire investor Wilbur Ross said a drop in reinsurer stock prices over the past 12 months makes consolidation more likely, and said he was considering buying and combining reinsurers himself.

IPC held talks with at least eight companies last year before accepting Max Capital's merger proposal, according to a regulatory filing. Under the purchase agreement, IPC isn't allowed to engage in discussions with other potential bidders.

Validus CEO Edward Noonan said in a March 31 letter to IPC that his firm's proposal offered a better match, more opportunities for growth and a less risky investment portfolio. Validus asked for a response by April 15, and predicted the deal could be completed sooner than the closing estimate in the Max Capital proposal.

Mr. Becker sent a letter in response yesterday, saying Validus's business is too similar to IPC's for a combination to provide much diversification, and said the terms of the Max Capital agreement require shareholder votes in June. Only if shareholders vote against the deal can they begin considering the Validus proposal, meaning it couldn't be completed for at least three months after that, he said in the interview.

"It is mathematically impossible for the Validus proposal to close before September, which is right in the middle of hurricane season," he said in the interview. "That doesn't seem to be the best time to try to combined two hurricane-oriented companies."

Mr. Noonan responded in a new letter last night, urging Mr. Becker to "free the IPC board from the shackles that your Amalgamation Agreement has placed on the ability of the members of the IPC board to exercise their fiduciary duties under Bermuda law, so as to create a level playing field on which the shareholders of IPC will be able to decide which of the two proposals is indeed superior".

IPC fell 60 cents, or 2.2 percent, to $26.88 at in Nasdaq trading. Max Capital fell 19 cents, or 1.1 percent, to $17.61. Validus, formed in Bermuda in 2005 with the help of former Marsh & McLennan Cos. chief executive officer Jeffrey Greenberg, fell 41 cents, or 1.7 percent, to $23.50 in New York Stock Exchange composite trading.