IPC Holdings Ltd.'s board of directors last night said that Validus Holdings Ltd.'s latest sweetened takeover offer would not be in the best interests of IPC shareholders.

And Max Capital Group Ltd., which has agreed to merge with IPC, said Validus was offering IPC shareholders "an overvalued and risky currency".

Meanwhile, Validus said last night that proxy advisory firm RiskMetrics Group had reiterated its recommendation that IPC shareholders reject the proposed merger with Max.

Under the latest Validus offer, announced on Monday, IPC shareholders would receive $3.75 in cash for each IPC common share, an increase of 75 cents per share from its previous offer, as well as 1.1234 Validus voting common shares.

The IPC-Max amalgamation agreement will go to the vote on Friday, when shareholders of both Bermuda insurers have their say in the companies' annual general meetings.

Class of 2005 reinsurer Validus is working on persuading IPC shareholders to reject the merger, so it can push on with its own effort to take over the 16-year-old reinsurer.

IPC announced last Friday it would pay two special cash dividends totalling $2.50 per share to IPC shareholders if the IPC/Max deal closes.

IPC chairman Kenneth Hammond said: "Validus continues to attempt to acquire IPC's capital at a substantial discount to book value and its latest offer still does not have the same potential for delivering shareholder value as the amalgamation with Max."

He added: "As we have also told our shareholders, Validus's claim that it can complete an acquisition of IPC with 'speed and certainty' is simply wrong; it cannot be completed until mid-August, at the very earliest, even assuming that IPC were to proceed with Validus on a friendly basis."

Max chairman and CEO Marston Becker said: "The Validus proposal is simply a promise — a promise to provide an overvalued currency that offers shareholders no diversification and a hope that you can double up your catastrophe exposure and see no loss activity.

"All Validus continues to offer is a concept that is constantly changing. By contrast, the IPC-Max merger provides real fundamental current and long-term strategic value, true diversification that produces more stable returns, and a tangible transaction that is ready to close."

Validus chairman and CEO Ed Noonan said: "If IPC shareholders reject the Max transaction, we hope that IPC's Board will do the right thing and support our increased offer, which provides greater value and can be completed on a timely basis for the benefit of IPC shareholders. We believe IPC's board should be focused on maximising value for its shareholders, rather than continuing to try to create confusion about Validus' superior offer."