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Tax-Dodge Scrutiny in U.S. Repels Bidders From Bermuda Takeovers

The IRS’s scrutiny of tax avoidance in offshore locations has discouraged bidders from taking over reinsurers, potentially reducing the companies’ value.

Montpelier Re Holdings Ltd. and Platinum Underwriters Holdings Ltd., both based in Bermuda, have each said in recent regulatory filings that potential suitors backed away last year because of risks tied to taxes.