American Equity Opts for Brookfield Tie-Up, Snubs Takeover, , on October 19, 2020 at 1:20 pm

By ILP
On 10/19/2020
In Financial News
Tags:

(Bloomberg) — American Equity Investment Life Holding Co. confirmed it plans to launch a new partnership with Brookfield Asset Management Inc. after rejecting a proposed $3 billion takeover from Athene Holding Ltd. and Massachusetts Mutual Life Insurance Co.American Equity said in a statement that under the partnership, Brookfield will acquire a 19.9% stake in the insurer for roughly $37 a share, or a 15% premium on where the stock closed Friday. Brookfield will also take a seat on American Equity’s board as part of the arrangement, the companies said in separate statements, confirming an earlier report by Bloomberg News.“This compelling strategic transaction, which we have been discussing with Brookfield since March, demonstrates the substantial shareholder value we are creating through execution of our AEL 2.0 strategy,” said Anant Bhalla, American Equity’s chief executive officer, in the statement.American Equity also formally rejected a $36-a-share takeover proposal from Athene and MassMutual on the grounds that it undervalues the company and is opportunistic. American Equity said it believes its current strategy will maximize long-term value for shareholders.“The board of directors and shareholders of American Equity will have to decide what is in the best interests of the company,” a representative for Athene said in an emailed statement. Athene’s all-cash joint proposal with MassMutual represents a large premium for shareholders and offers continuity for American Equity constituents, according to the statement. Following the decision, Athene will continue with the execution of its standalone strategy, it said.A representative for MassMutual was not immediately available for comment.Shares in American Equity closed Friday at $32.30 in New York, valuing the company at roughly $2.97 billion. The stock was down almost 11% at 9:18 a.m. in early New York trading Monday. The company’s shares have climbed almost 47% since the day before the proposed takeover from Athene and MassMutual was made public Oct. 1.Brookfield, one of the world’s largest alternative asset managers, will make the investment in two tranches, the second half of which would be completed in early 2021, the companies said. The deal will also see Brookfield reinsure as much as $10 billion in existing and future annuity liabilities, they added.American Equity said it would concurrently launch a $500 million share buyback program from the proceeds of the investment to offset the dilution the deal will have on existing holders because of the issuance of common shares to Brookfield.Brookfield ExpansionThe partnership will be Brookfield’s largest foray yet into insurance. Last month, Bruce Flatt, Brookfield’s chief executive officer, said at an investor day that he believed the time was right to expand into the sector with interest rates at zero. Over time, he said, the insurance sector could be a $100 billion to $200 billion business for his firm.“We are pleased to be investing in American Equity and to partner with the business in reinsurance as it grows its leading position as a retirement-planning annuity provider,” said Sachin Shah, Brookfield’s chief investment officer, in a statement. “This transaction represents a meaningful investment for us in the attractive U.S. insurance market and we believe our alternative asset strategies can deliver long-term value to the company.”Brookfield currently has roughly $550 billion in assets under management, according to its website.“The Brookfield partnership ‘clicks a lot of boxes’ as far as being a positive incremental step forward for the company,” Mark Dwelle, an analyst at RBC Capital Markets, said in a note to clients, adding that the capital support can help long-term growth. “We’re positive on the partnership if that’s what is next for AEL. The ball is now in MassMutual’s court to press their proposal or allow AEL to execute this alternative long-term vision for the company.”Bhalla’s StrategyThe partnership with Brookfield would be an expansion of American Equity’s AEL 2.0 strategy under Bhalla. American Equity also announced an agreement with Varde Partners and Agam Capital Management last month as part of that strategy.American Equity disclosed at the beginning of this month that it was reviewing the offer from Athene, which is backed by Apollo Global Management Inc., and MassMutual. As part of the proposed deal, MassMutual would get American Equity’s insurance units and employees and then reinsure the bulk of the business to Athene. In addition, Athene would acquire the holding company and assume all of American Equity’s debt.American Equity, which was among the top 20 sellers of fixed annuities in the U.S. during the second quarter, has been a frequent target of deal speculation. Athene had walked away from talks last year with the insurer, a person familiar with the matter previously said.(Updates with shares in seventh paragraph, analyst note in 13th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.,

American Equity Opts for Brookfield Tie-Up, Snubs Takeover(Bloomberg) — American Equity Investment Life Holding Co. confirmed it plans to launch a new partnership with Brookfield Asset Management Inc. after rejecting a proposed $3 billion takeover from Athene Holding Ltd. and Massachusetts Mutual Life Insurance Co.American Equity said in a statement that under the partnership, Brookfield will acquire a 19.9% stake in the insurer for roughly $37 a share, or a 15% premium on where the stock closed Friday. Brookfield will also take a seat on American Equity’s board as part of the arrangement, the companies said in separate statements, confirming an earlier report by Bloomberg News.“This compelling strategic transaction, which we have been discussing with Brookfield since March, demonstrates the substantial shareholder value we are creating through execution of our AEL 2.0 strategy,” said Anant Bhalla, American Equity’s chief executive officer, in the statement.American Equity also formally rejected a $36-a-share takeover proposal from Athene and MassMutual on the grounds that it undervalues the company and is opportunistic. American Equity said it believes its current strategy will maximize long-term value for shareholders.“The board of directors and shareholders of American Equity will have to decide what is in the best interests of the company,” a representative for Athene said in an emailed statement. Athene’s all-cash joint proposal with MassMutual represents a large premium for shareholders and offers continuity for American Equity constituents, according to the statement. Following the decision, Athene will continue with the execution of its standalone strategy, it said.A representative for MassMutual was not immediately available for comment.Shares in American Equity closed Friday at $32.30 in New York, valuing the company at roughly $2.97 billion. The stock was down almost 11% at 9:18 a.m. in early New York trading Monday. The company’s shares have climbed almost 47% since the day before the proposed takeover from Athene and MassMutual was made public Oct. 1.Brookfield, one of the world’s largest alternative asset managers, will make the investment in two tranches, the second half of which would be completed in early 2021, the companies said. The deal will also see Brookfield reinsure as much as $10 billion in existing and future annuity liabilities, they added.American Equity said it would concurrently launch a $500 million share buyback program from the proceeds of the investment to offset the dilution the deal will have on existing holders because of the issuance of common shares to Brookfield.Brookfield ExpansionThe partnership will be Brookfield’s largest foray yet into insurance. Last month, Bruce Flatt, Brookfield’s chief executive officer, said at an investor day that he believed the time was right to expand into the sector with interest rates at zero. Over time, he said, the insurance sector could be a $100 billion to $200 billion business for his firm.“We are pleased to be investing in American Equity and to partner with the business in reinsurance as it grows its leading position as a retirement-planning annuity provider,” said Sachin Shah, Brookfield’s chief investment officer, in a statement. “This transaction represents a meaningful investment for us in the attractive U.S. insurance market and we believe our alternative asset strategies can deliver long-term value to the company.”Brookfield currently has roughly $550 billion in assets under management, according to its website.“The Brookfield partnership ‘clicks a lot of boxes’ as far as being a positive incremental step forward for the company,” Mark Dwelle, an analyst at RBC Capital Markets, said in a note to clients, adding that the capital support can help long-term growth. “We’re positive on the partnership if that’s what is next for AEL. The ball is now in MassMutual’s court to press their proposal or allow AEL to execute this alternative long-term vision for the company.”Bhalla’s StrategyThe partnership with Brookfield would be an expansion of American Equity’s AEL 2.0 strategy under Bhalla. American Equity also announced an agreement with Varde Partners and Agam Capital Management last month as part of that strategy.American Equity disclosed at the beginning of this month that it was reviewing the offer from Athene, which is backed by Apollo Global Management Inc., and MassMutual. As part of the proposed deal, MassMutual would get American Equity’s insurance units and employees and then reinsure the bulk of the business to Athene. In addition, Athene would acquire the holding company and assume all of American Equity’s debt.American Equity, which was among the top 20 sellers of fixed annuities in the U.S. during the second quarter, has been a frequent target of deal speculation. Athene had walked away from talks last year with the insurer, a person familiar with the matter previously said.(Updates with shares in seventh paragraph, analyst note in 13th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

,

Contact Us

Please use our Instant Quote form to see if you're pre-qualified for a non-recourse stock loan, or if you have any questions or feedback, please email, call or chat with us.

deals@internationalliquiditypartners.com

+44 20 3994 1588

Headquarters: Hunkins Waterfront Plaza, Charlestown, Nevis

Open 24 hours a day / 7 days a week / 365 days a year

 

 

 

Frequently Asked Questions

What Is Securities-Based Lending?
Securities-based lending, or a stock loan, is the practice of using market investments such as stocks, ETF’s, warrants, bonds, or real estate investment trusts as collateral for a loan.
How much money can I get for my securities?
Borrow up to 80% of the value of your pledged investments giving you the capital you need to expand your business, purchase real estate, or tackle a costly project.
What happens if my securities lose value?
With a non-recourse stock loan, you can walk away from your securities at any time and keep the loan money with no negative credit consequences even if the investments lose value.
Is my information safe with ILP?
We pride ourselves on outstanding service and make client confidentiality our top priority. You can always be absolutely certain your information is safe with us.
How long does it take for the disbursement of funds?
Most of the transactions we process take less than 7 days from application to the disbursement of funds giving you cash quickly when you need it most.
What credit score do I need to qualify?
There are no credit checks or personal guarantees necessary with our services. Your pledged securities are the only collateral required for the loan you receive.

Instant Quote

Please fill out your information to see if you are pre-qualified.

Enter the Stock Symbol.

Select the Exchange.

Select the Type of Security.

Please enter your First Name.

Please enter your Last Name.

Please enter your phone number.

Please enter your Email Address.

Please enter or select the Total Number of Shares you own.

Please enter or select the Desired Loan Amount you are seeking.

Please select the Loan Purpose.

Please select if you are an Officer/Director.

International Liquidity Partners, LLC may only offer certain information to persons who are “Accredited Investors” and/or “Qualified Clients” as those terms are defined under applicable Federal Securities Laws. In order to be an “Accredited Investor” and/or a “Qualified Client”, you must meet the criteria identified in ONE OR MORE of the following categories/paragraphs numbered 1-20 below.

International Liquidity Partners, LLC cannot provide you with any information regarding its Loan Programs or Investment Products unless you meet one or more of the following criteria. Furthermore, Foreign nationals who may be exempt from qualifying as a U.S. Accredited Investor are still required to meet the established criteria, in accordance with International Liquidity Partners, LLC’s internal lending policies. International Liquidity Partners, LLC will not provide information or lend to any individual and/or entity that does not meet one or more of the following criteria:

1) Individual with Net Worth in excess of $1.0 million. A natural person (not an entity) whose net worth, or joint net worth with his or her spouse, at the time of purchase exceeds $1,000,000 USD. (In calculating net worth, you may include your equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities. Your inclusion of equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.)

2) Individual with $200,000 individual Annual Income. A natural person (not an entity) who had individual income of more than $200,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

3) Individual with $300,000 Joint Annual Income. A natural person (not an entity) who had joint income with his or her spouse in excess of $300,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

4) Corporations or Partnerships. A corporation, partnership, or similar entity that has in excess of $5 million of assets and was not formed for the specific purpose of acquiring an interest in the Corporation or Partnership.

5) Revocable Trust. A trust that is revocable by its grantors and each of whose grantors is an Accredited Investor as defined in one or more of the other categories/paragraphs numbered herein.

6) Irrevocable Trust. A trust (other than an ERISA plan) that (a)is not revocable by its grantors, (b) has in excess of $5 million of assets, (c) was not formed for the specific purpose of acquiring an interest, and (d) is directed by a person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of an investment in the Trust.

7) IRA or Similar Benefit Plan. An IRA, Keogh or similar benefit plan that covers only a single natural person who is an Accredited Investor, as defined in one or more of the other categories/paragraphs numbered herein.

8) Participant-Directed Employee Benefit Plan Account. A participant-directed employee benefit plan investing at the direction of, and for the account of, a participant who is an Accredited Investor, as that term is defined in one or more of the other categories/paragraphs numbered herein.

9) Other ERISA Plan. An employee benefit plan within the meaning of Title I of the ERISA Act other than a participant-directed plan with total assets in excess of $5 million or for which investment decisions (including the decision to purchase an interest) are made by a bank, registered investment adviser, savings and loan association, or insurance company.

10) Government Benefit Plan. A plan established and maintained by a state, municipality, or any agency of a state or municipality, for the benefit of its employees, with total assets in excess of $5 million.

11) Non-Profit Entity. An organization described in Section 501(c)(3) of the Internal Revenue Code, as amended, with total assets in excess of $5 million (including endowment, annuity and life income funds), as shown by the organization’s most recent audited financial statements.

12) A bank, as defined in Section 3(a)(2) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

13) A savings and loan association or similar institution, as defined in Section 3(a)(5)(A) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

14) A broker-dealer registered under the Exchange Act.

15) An insurance company, as defined in Section 2(13) of the Securities Act.

16) A “business development company,” as defined in Section 2(a)(48) of the Investment Company Act.

17) A small business investment company licensed under Section 301 (c) or (d) of the Small Business Investment Act of 1958.

18) A “private business development company” as defined in Section 202(a)(22) of the Advisers Act.

19) Executive Officer or Director. A natural person who is an executive officer, director or general partner of the Partnership or the General Partner, and is an Accredited Investor as that term is defined in one or more of the categories/paragraphs numbered herein.

20) Entity Owned Entirely By Accredited Investors. A corporation, partnership, private investment company or similar entity each of whose equity owners is a natural person who is an Accredited Investor, as that term is defined in one or more of the categories/paragraphs numbered herein.

Please read the notice above and check the box below to continue.

Nevis Office

Main Street
Hunkins Waterfront Plaza
Charlestown, Nevis

New York Office

Coming Soon!

Follow Us

Market Coverage