CA - Brookfield Reinsurance makes $55 per share offer for American Equity Investment

2023-06-27 07:31:01 ET

Brookfield Reinsurance ( NYSE: BNRE ) proposed to acquire American Equity Investment Life Holding ( NYSE: AEL ) for a combination of stock and cash that totals ~$55.00 per share for AEL in a transaction that would increase Brookfield Reinsurance assets under management by about $100B.

American Equity Investment ( AEL ) shares climbed 13% in Tuesday premarket trading, following an 11% jump on Monday after Bloomberg reported the offer.

Brookfield Reinsurance intends to continue AEL's focus on alternative asset strategies and expects Brookfield Asset Management ( NYSE: BAM ) will manage a significant portion of AEL's assets. The deal, if completed, would increase BAM's overall AUM to ~$900B through its asset management, wealth, and insurance subsidiaries.

BNRE is offering to pay $38.85 per share in cash and Brookfield Asset Management ( BAM ) class A limited voting shares having a value equal to $16.15 based on the unaffected 90-day VWAP as of June 23. The per-share price represents a 35% premium to American Equity Investment's ( AEL ) closing price as of June 23, 2023.

As a result of the deal, BAM's public float would increase by ~10%, which is important to the company as it seeks to broaden its shareholder base. Brookfield Corporation's ( NYSE: BN ) interest in BAM would decline to 73% from 75%. There will be no net new issuance of shares of BAM, BN, or BNRE, meaning the transaction won't dilute the shares of those three companies.

American Equity Investment ( AEL ) confirmed the receipt of the proposal and said its board will review it. The company has granted Brookfield Reinsurance ( BNRE ) a limited waiver of BNRE's standstill obligation under its existing investment agreement with AEL to permit BNRE to make the proposal.

Brookfield Corporation ( BN ) shares slipped 0.7% in premarket trading.

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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