Validus, a Bermuda-based reinsurer, made an unsolicited bid on Tuesday to buy fellow Bermuda insurer IPC for $1.68bn in stock, potentially throwing a merger struck last month between IPC and Max Capital off track.

Validus said it would pay 1.2037 of its shares for each IPC common share, valuing IPC at $29.98 per share as of Monday’s close, an 18 per cent premium to its latest share price. A 5 per cent drop in shares of Validus after the offer was announced on Tuesday brought the deal’s value down to $28.50 per share, or $1.6bn.