The Bermuda Supreme Court has dismissed the application by Bermuda reinsurer Validus Holdings Ltd. to convene a meeting of IPC Holdings Ltd. shareholders in connection with its attempted hostile takeover of the company.

Validus wants to derail a planned amalgamation between IPC and fellow Bermuda-based insurer and reinsurer Max Capital Group Ltd. in order to take over IPC.

The court's decision came as a blow to Validus just two weeks before IPC and Max shareholders vote on the merger deal. An it is a second setback in the courts for Validus after it was unsuccessful in suing IPC and Max over the "no talk" and $50 million termination fee clauses in their agreement.

Two weeks ago Validus made a sweetened takeover offer, worth about $1.69 billion, offering IPC shareholders $3 in cash, plus 1.1234 Validus shares for each IPC share.

Validus chairman and chief executive Ed Noonan said: "Despite the extraordinary efforts by IPC and Max, the court's ruling supports the rights of IPC shareholders to obtain the value offered by Validus should they so desire. Validus is pleased that, if the Max deal is voted down, it will have a clear path to pursue a Scheme of Arrangement."

IPC chairman Kenneth Hammond responded differently to the court's decision.

"Validus has now lost both of its attempts to interfere with the IPC/Max amalgamation through time-consuming legal manoeuvres," Mr. Hammond said. "The Court has ordered Validus to pay IPC's costs in both cases. Describing the course proposed by Validus as unprecedented, the Chief Justice stated that he had no doubt that he should not adopt it.

"Today's ruling reinforces IPC's long-stated view that the Validus scheme is unprecedented and is not appropriate. In addition, IPC continues to believe that the Validus exchange offer is highly conditional and faces substantial obstacles to completion."

Max Capital chairman and CEO Martson (Marty) Becker, said in statement released on Friday: "The result reached today in the Bermuda court was the appropriate one.

"Validus has unsuccessfully tried almost every legal manoeuvre imaginable, and this decision eliminates uncertainty for shareholders of IPC and Max.

"Max and IPC have a deal that is ready to be voted upon and closed. It has received broad support and creates meaningful value for all shareholders today and in the future."

The Max-IPC merger agreement has received the necessary regulatory approvals.

At their annual general meetings on June 12, the shareholders of both companies will decide with their votes whether it goes ahead.