Bermuda re/insurers IPC Holdings and Max Capital said last night they had cleared the regulatory hurdles needed to go ahead with their amalgamation, and they expected the merger transaction to be completed on June 12, pending shareholder approval.

The news came hours after it was revealed that another Bermuda reinsurer, Validus Holdings, suffered a legal setback as its pushes on with efforts to mount a hostile takeover of IPC.

The Bermuda Supreme Court turned down Validus' request for an expedited trial after the reinsurer filed a lawsuit against IPC and Max, challenging the $50 million termination fee and "no-talk" provision contained in their merger agreement.

Validus had wanted to fast-track the trial to get the issue dealt with before IPC and Max shareholders vote on the merger deal at their June 12 meetings. The court ordered that Validus pay IPC and Max's legal costs.

IPC said it was happy with the ruling and added that it would not impact the closing of its deal with Max, while Max continued to dismiss Validus' litigation as "without merit" and meant as a "distraction to shareholders".

But Validus said the judgment was not based on the merit of its claims and would have no effect on the company's intention to acquire IPC.

After its setback in the courtroom on Wednesday, Validus went back to the Supreme Court yesterday and filed an application for the court to convene a meeting of IPC shareholders, in connection with its offer, which is worth around $1.6 billion, for IPC.

Among the bodies satisfied with IPC and Max's applications are the US Securities and Exchange Commission, the Council and Society of Lloyd's, the Monetary Authority of Singapore, the UK Financial Services Authority and the Irish Financial Services Regulatory Authority.

IPC chairman Kenneth Hammond said: "The IPC board is pleased with this result and strongly believes that the combination with Max will create an industry leader with a diversified, balanced global underwriting platform.

"IPC and Max have a fully negotiated transaction with compelling strategic benefits and superior value for IPC shareholders. We urge IPC shareholders to vote the white proxy card for all the proposals associated with the merger."

Max chairman and CEO Marston (Marty) Becker said: "We are very pleased that we are now in a position to close the amalgamation quickly upon the receipt of shareholder approval. Obtaining the final required regulatory approvals and the ruling from the Bermuda Supreme Court have set the stage for a simple choice for both sets of shareholders."

Validus said in a statement also released yesterday that the Supreme Court's decision was only related to the timetable for the proceedings and was not a judgment on the merits of Validus' claims.

"The judge acknowledged that Validus has raised 'serious questions to be tried'," it read. "The court's ruling has no effect on Validus' resolve to complete its acquisition of IPC, including the Exchange Offer we announced on May 12, 2009 and the Scheme of Arrangement, neither of which is conditioned on the elimination of the possible termination fee to Max."