Validus Holdings Ltd. has agreed to buy fellow Bermuda reinsurer IPC Holdings Ltd. in a deal worth $1.7 billion.

The two companies announced that their boards of directors has agreed on a sweetened deal, which saw Validus double the cash payment it is offering to IPC shareholders.

Pending shareholder approval, IPC shareholders will receive $7.50 a share in cash plus 0.9727 of a Validus share for each IPC share. The bid values IPC at $29.48 a share, 6.8 percent more than yesterday’s close in New York.

Validus’s offer beat out a rival bid from another Bermuda reinsurer Flagstone. Last month IPC shareholders rejected a merger with Max Capital Group.

“Validus will have significantly greater size and scale to take advantage of attractive rate trends across our business lines and growing overall demand for reinsurance from capital-constrained businesses,” chief executive officer Ed Noonan said in the statement.

Several other companies have made advances to IPC in a bidding war that has intensified since the Max deal was rejected.

“Over the past several weeks, we conducted a thorough and intensive process that included negotiations with, and offers from, multiple parties,” IPC chairman Kenneth Hammond said. “We believe that the agreement we announced today represents the best outcome for our shareholders.”

Read the full story in tomorrow’s Royal Gazette.