BAM - American Equity Investment downgraded at Raymond James on valuation

2023-06-28 08:56:56 ET

American Equity Investment Life ( NYSE: AEL ) was cut to market perform from strong buy at Raymond James in light of its valuation amid a takeover offer from Brookfield Reinsurance ( NYSE: BNRE ).

AEL has a takeout valuation of $58 per share based on comparable transactions, Raymond James analyst Wilma Burdis wrote in a note on Wednesday. Burdis noted that Brookfield ( NYSE: BAM ) could pay "considerably more" given the upside it could gain from "repositioning the portfolio and increasing production."

Brookfield Reinsurance ( BNRE ) on Tuesda y proposed to acquire AEL for a combination of stock and cash that totals $55.00 per share. The latest takeover offer for AEL comes after Prosperity Group Holdings, which was backed by hedge fund Elliott Investment Management, withdrew its proposal to acquire AEL for $45.00 per share in February after AEL rebuffed the offer in December.

"AEL has fought to remain standalone for years amid unsolicited bids and takeout rumors, and we have no guarantee that the current situation is any different," Burdis wrote.

On Tuesday, before the exact terms of the AEL offer were disclosed, an RBC analyst wrote that a takeover price in the low $50s per share was likely warranted.

More on American Equity:

• The Rise of Annuities: How American Equity Is Capitalizing
• American Equity enters into accelerated $200M buyback agreement
• American Equity Investment stock dives after Prosperity withdraws takeover proposal

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