* Validus, Transatlantic hurt by catastrophe costs
* Transatlantic starts to incur merger costs
* Validus has taken offer to shareholders
NEW YORK, July 27 Reinsurer Validus Holdings
Ltd (VR.N) missed second-quarter expectations, as underwriting
income fell sharply and the company posted losses from the
record-setting U.S. tornadoes of April and May.
Validus is in the middle of a bidding war for competitor
Transatlantic Holdings TRH.N, having taken its hostile bid
directly to shareholders after Transatlantic stood by its
planned deal with Allied World (AWH.N).
Transatlantic also missed expectations for the quarter.
Validus on Wednesday reported a net profit of $109.9
million, or $1.05 per share, compared with a year-earlier net
profit of $179.8 million, or $1.44 per share.
On an operating basis, including investment and foreign
exchange gains and losses, Validus earned 78 cents per share.
Analysts polled by Thomson Reuters I/B/E/S on average had
expected earnings of 90 cents per share.
Transatlantic also came in shy of expectations, with
operating income of $1.28 per share, compared with analysts'
expectations for $1.36. The company also had elevated levels of
disaster losses as well as the initial merger expenses for the
Allied World made its $3.03 billion all-stock bid on June
12, which Transatlantic's largest shareholder immediately said
it may oppose. Validus made its unsolicited $3.15 billion
cash-and-stock offer on July 12.
Transatlantic at one point said it would open talks with
Validus, but the sides failed to negotiate a confidentiality
agreement and Validus then took its bid to shareholders.
(Reporting by Ben Berkowitz; Editing by Richard Chang)