IPC Holdings said last night that its board of directors had reaffirmed its commitment to a merger agreement with fellow Bermuda re/insurer Max Capital, after considering a rival offer from Validus Holdings.

IPC and Max announced their plans to merge on March 1, since which Validus, another Island-based company, came in with a $1.7 billion, all-share offer for IPC.

The IPC-Max amalgamation plan, which will result in a new entity carrying the name of Max Capital and headed by current Max CEO Marty Becker, will go to shareholders of both companies for approval.

The IPC board voted unanimously to reaffirm the Max deal and did not consider the Validus offer to be a "superior proposal", according to IPC's statement. The board's decision came after "careful consultation with management and financial and legal advisors".

IPC chairman Kenneth Hammond said: "The IPC board continues to believe that the combination with Max will create a stronger and more diversified underwriting franchise with less correlated risk.

"Our newly combined entity will have the scale and flexibility to better manage capital and take advantage of attractive opportunities in the property-casualty marketplace, as and when they arise.

"In addition, our transaction with Max has more certainty and a clearer path to close, and we expect it to close more quickly than any Validus transaction. We are confident this combination is in the best interests of IPC, and we recommend shareholders vote in favour of this transaction at the upcoming shareholders' meeting."