AEL - American Equity Investment Life may be worth in $50 a share range in takeout - analysts

American Equity Investment Life ( NYSE: AEL ) is likely worth in the $50's a share range in a takeout after the life insurer rejected a $45 a share offer from Prosperity Group , analysts said.

AEL shares haves regularly traded in the low $40's during 2022 and historically takeout premiums in the sector are at least 20%-30%, implying a price in the +$50 range, RBC analyst Mark Dwelle wrote in a note on Tuesday, who has an outperform and $44 price target on AEL.

"We expect the ball is now in Prosperity/Elliott's court as to whether they wish to sweeten their offer or attempt to take it to shareholders for a vote," Dwelle wrote.

Dwelle noted that it's possible other bidders may emerge and highlighted that AEL ( AEL ) rejected a joint $36 a share bid from Athene and MassMutual in October 2020.

Raymond James analyst Wilma Burdis agreed that the $45 offer is "too low" and sees a $53 a share takeout as warranted.

A "significantly higher price could be warranted if AEL attracts multiple bidders," Burdis, who has a strong buy rating on AEL, wrote in a Wednesday note.

Burdis in a Monday initiation of AEL said the life insurer has the potential to be targeted as a takeout candidate.

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