American Equity Chooses Brookfield Deal Over Takeover Offer; To Buy Back $500 Mln Shares

(RTTNews) - American Equity Investment Life Holding Co. (AEL) announced Monday that it has entered into a strategic Partnership With Brookfield Asset Management Inc., under which Brookfield will acquire a 19.9% ownership interest in American Equity.

The company has rejected the unsolicited, non-binding acquisition proposal from Athene and MassMutual made public by Athene on October 1, noting that it is opportunistic and significantly undervalues the company.

Regarding its deal Brookfield, the company said it is partnering for the reinsurance of $5 billion of existing liabilities and up to an incremental $5 billion of new sales of American Equity's IncomeShield or similar fixed index annuity products.

American Equity will receive access to Brookfield investments in targeted asset classes as part of the strategic partnership.

As part of the stake acquisition, Brookfield will make an initial purchase of a 9.9% equity interest at $37.00 per share promptly following Hart-Scott-Rodino approval, and a second purchase of an incremental 10.0% equity interest, at the greater value of $37.00 per share or adjusted book value per share.

Further, American Equity's Board has authorized the repurchase of up to $500 million of common shares to be funded with the proceeds of the Brookfield equity investment and cash on hand.

The repurchase is expected to offset dilution from the issuance of common shares to Brookfield. American Equity expects to commence the share repurchase after its third quarter earnings announcement.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Latest Markets Videos


Founded in the late 1990s by Andrew Mariathasan in New York, with the goal of covering Wall Street for a new generation of investors, RTTNews has expanded steadily over the years to become a trusted provider of content for a wide array of subjects across several platforms. RTT's Financial Newswire is relied upon by some of the world's largest financial institutions, including banks, brokerages, trading platforms and financial exchanges.

Learn More