Andrey Popov
Brookfield Reinsurance (New York Stock Exchange: BNRE(proposal to acquire American Equity Investment Life Holding)New York Stock Exchange: AEL) for a mixture of stock and cash totaling $55.00 per share of AEL in a transaction that will increase Brookfield Reinsurance’s assets under management About $100 billion.
Shares of American Equity Investment (AEL) jumped 13% in trading on Tuesday, after a jump of 11% on Monday after Bloomberg reported on the offer.
Brookfield Reinsurance intends to continue AEL’s focus on alternative asset strategies and Brookfield Asset Management expects (New York Stock Exchange: PAM) will manage a significant portion of AEL’s assets. The deal, if completed, would increase BAM’s total assets under management to approximately $900 billion through Asset Wealth Management and its underwriters.
BNRE is offering to pay $38.85 per share in cash and Brookfield Asset Management (BAM) limited voting shares worth $16.15 based on VWAP for a 90-day unaffected period effective June 23. The stock price is a 35% premium to the closing price of American Equity Investment Company (AEL) as of June 23, 2023.
As a result of this transaction, BAM’s overall float will increase by approximately 10%, which is significant for the company as it seeks to expand its shareholder base. Brookfield Corporation (New York Stock Exchange: BN) Interest in the BH market will drop to 73% from 75%. There will be no net new issuance of shares of BAM, BN or BNRE, which means the deal will not dilute the shares of those three companies.
American Equity Investment (AEL) confirmed receipt of the offer and said it would be reviewed by its board of directors. The Company has granted Brookfield Reinsurance (BNRE) a limited waiver of BNRE’s obligation to pause under its existing investment agreement with AEL to allow BNRE to submit the proposal.
Brookfield Corporation (BN) down 0.7% in pre-market trading.