Flagstone Reinsurance Holdings Ltd. last night threw its hat in the ring in the contest to acquire its fellow Bermuda reinsurer IPC Holdings Ltd.

Flagstone is offering 2.638 shares of its stock plus $5.50 in cash for each IPC share - a bid which it claims is superior to the offer previously put forward by another Bermuda reinsurer, Validus Holdings Ltd.

At yesterday's closing prices, Flagstone's offer values IPC at $33.62 per share.

Flagstone chairman Mark Byrne said: "Our offer contains a materially greater cash component and offers a greater overall value to IPC shareholders.

"Our offer is not subject to financing and is made on a friendly basis, with a plan to work with the existing board and management of IPC to preserve the business and franchise value of IPC in the combined entity.

"We believe this approach together with the significant opportunities brought to the combined entity via Flagstone's global underwriting platform and industry-leading technical infrastructure will maximise value for both IPC and Flagstone shareholders. We have substantially completed our confirmatory due diligence with no issues identified to date."

Flagstone, like Validus a Class of 2005 reisnurer, will hold a webcast and conference call next Monday, at 11 a.m. Bermuda time, to discuss its proposal.

The offer came after IPC's directors said they were planning to set a date for a special shareholders meeting, necessitated because Validus mustered sufficient requisitions from IPC shareholders to force the gathering.

Validus has made it clear that its intention is to oust the IPC board, which has recommended that its shareholders reject Validus's advances.

IPC, meanwhile, reiterated that it was continuing discussions with other suitors. IPC chairman Kenneth Hammond said: "The board of directors of IPC now has the responsibility to set a date for the special meeting. We will set a date after consultation with our advisers." Validus said last week it had received requisitions representing 54 percent of IPC common shares.

"Our focus continues to be on value maximisation for IPC's shareholders," Mr. Hammond added. "Negotiations and due diligence discussions are advancing with several parties, including Validus, interested in an acquisition of IPC.

"The board continues to work on behalf of the IPC shareholders to encourage offers representing more value to shareholders than Validus's current offer, which is 19 percent below IPC's book value and is only a four percent premium over our current stock price.

"At the same time, we are continuing to work with Validus and we have encouraged Validus to increase its offer price." Earlier this month, IPC shareholders rejected a proposed merger with Max Capital Group Ltd. after Validus had come in with a rival offer.