PartnerRe Swings to a Loss

Reinsurer PartnerRe Ltd. swung to a second-quarter loss as it reported a sharp drop in revenue and a large loss in investments.

The Bermuda-based company, which is at the center of a merger tug of war between Axis Capital Holdings Ltd. and Italian investment firm Exor SpA, said it expects results to pick up in the fall, when many of its accounts are up for renewal.

PartnerRe and Axis agreed to merge in January, in a deal valued at about $11 billion that would create one of the world's largest reinsurance and specialist insurance companies.

But Exor, which owns a controlling stake in Fiat Chrysler Automobiles, countered with a sweetened bid for PartnerRe valued at about $140.50 a share, including a $3 dividend, The Wall Street Journal reported. Axis's offer, meanwhile, would value PartnerRe at just over $139, based on Friday's closing price.

Proxy-advisory firms Glass Lewis & Co. and Institutional Shareholder Services Inc. have recommended PartnerRe shareholders vote against the proposed merger with Axis Capital Holdings Ltd., saying that Italian investment firm Exor SpA presented a better offer.

Overall, PartnerRe reported a loss of $88.9 million, or $2.16 a share after the payout of preferred dividends, compared with a year-earlier profit of $271.8 million, or $5.02 a share. Revenue dropped 28% to $1.19 billion.

Analysts surveyed by Thomson Reuters had projected a profit of $2.35 a share on $1.43 billion in revenue.

The company said it saw after-tax realized and unrealized losses on investments of $217.2 million, compared with gains of $123.7 million in the year-earlier quarter.

Shares, which were inactive after hours, closed Monday at $134.91, up 18% this year.

Write to Maria Armental at [e-mail]

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