American Equity Shareholders Gain: Analyst Explores Brookfield Reinsurance Acquisition
Portfolio Pulse from Lekha Gupta
RBC Capital Markets analyst Scott Heleniak has downgraded American Equity Investment Life Holding Co (AEL) to Sector Perform from Outperform, increasing the price target to $55 from $50. This follows AEL's acceptance of Brookfield Reinsurance Ltd's (BNRE) acquisition offer of approximately $4.3 billion. AEL shareholders will receive $55.00 per share, consisting of $38.85 in cash and 0.49707 of Brookfield Asset Management Ltd. (BAM) shares. The analyst does not foresee any regulatory hurdles and does not expect a higher bidder.
July 06, 2023 | 5:57 pm
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NEUTRAL IMPACT
AEL has been downgraded to Sector Perform from Outperform by RBC analyst following the acceptance of BNRE's acquisition offer. The price target has been increased to $55.
The acquisition offer by BNRE is seen as fairly priced and beneficial to AEL shareholders. However, the downgrade by the analyst may cause some investors to reconsider their positions.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEUTRAL IMPACT
BAM shares will be part of the payout to AEL shareholders as part of the acquisition deal with BNRE.
The inclusion of BAM shares in the payout to AEL shareholders could potentially increase demand for BAM shares. However, the overall impact on BAM's stock price is uncertain.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 60
POSITIVE IMPACT
BNRE's acquisition offer for AEL has been accepted and is seen as fairly priced. No regulatory hurdles are expected.
The acceptance of the acquisition offer by AEL is a positive development for BNRE. The lack of expected regulatory hurdles also bodes well for the completion of the deal.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80