Analyst Predicts Completion Of American Equity's $4.3B Acquisition At Current Offer Price
Portfolio Pulse from Lekha Gupta
Truist Securities analyst Mark Hughes has downgraded American Equity Investment Life Holding Co (AEL) to Hold from Buy, with an increased price target of $55. Hughes expects AEL's acquisition by Brookfield Reinsurance Ltd (BNRE) to be completed at the current offer price of ~$4.3 billion. AEL shareholders will receive $55.00 per AEL share, consisting of $38.85 in cash and 0.49707 of Brookfield Asset Management Ltd. (BAM) shares. Hughes estimates EPS of $6.30 in 2023 and $6.70 in 2024.
July 14, 2023 | 6:34 pm
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NEUTRAL IMPACT
AEL's acquisition by BNRE is expected to be completed at the current offer price. The stock has been downgraded to Hold from Buy.
The downgrade of AEL's stock and the expected completion of its acquisition by BNRE at the current offer price could lead to a neutral short-term impact on the stock. The acquisition price represents a premium, which is positive, but the downgrade could offset this.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEUTRAL IMPACT
BAM shares will be part of the payment to AEL shareholders in the acquisition by BNRE.
The news that BAM shares will be part of the payment to AEL shareholders in the acquisition by BNRE could have a neutral short-term impact on the stock. This could increase the liquidity of BAM shares in the market, but the impact on the stock price is uncertain.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 60
NEUTRAL IMPACT
BNRE is expected to complete the acquisition of AEL at the current offer price.
The news of BNRE's expected completion of the acquisition of AEL at the current offer price could have a neutral short-term impact on the stock. The acquisition could strengthen BNRE's portfolio, but the large expenditure could also impact financial stability in the short term.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80