Brookfield values American Equity at $4.3 bln in takeover offer

Annuities provider American Equity Investment Life Holding said on Tuesday it has received a takeover offer from its biggest shareholder, valuing the long-sought merger candidate at nearly $4.3 billion. The offer from the reinsurance arm of Canadian investment firm Brookfield comes months after AEL rejected a nearly $4 billion bid from Elliott Investment Management-backed insurance firm Prosperity Life, saying it "significantly undervalued" the company.

Annuities provider American Equity Investment Life Holding said on Tuesday it has received a takeover offer from its biggest shareholder, valuing the long-sought merger candidate at nearly $4.3 billion.

The offer from the reinsurance arm of Canadian investment firm Brookfield comes months after AEL rejected a nearly $4 billion bid from Elliott Investment Management-backed insurance firm Prosperity Life, saying it "significantly undervalued" the company. AEL had also fielded takeover interest from Athene Holding and Massachusetts Mutual Life Insurance Company in 2020.

Brookfield Reinsurance has offered $55 for each share of AEL it does not already own. The offer price marks a 35% premium to AEL's closing price on Friday, before media reports on a possible takeover proposal from Brookfield.

Shares of AEL were up 13.3% at $51.10 in premarket trading. The stock has lost 1% so far this year, as of last close. Brookfield's offer consists of $38.85 per share in cash and the rest in Brookfield Asset Management limited voting shares.

Brookfield has been aggressively beefing up its reinsurance business. In February, Brookfield Reinsurance also signed a $1.1 billion deal to take Argo Group International private. AEL said its board will review the offer and a deal is not guaranteed. If the deal with AEL is completed, it would boost Brookfield Reinsurance's assets under management to nearly $100 billion.

AEL provides annuities - an insurance contract customers typically buy for a steady income stream after retiring. Ardea Partners and J.P. Morgan are advising AEL on the offer.

 

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