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Phoenix (PNX) to be Acquired by Nassau for $217.2 Million

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The Phoenix Companies, Inc.PNX recently reached an acquisition agreement with Nassau Reinsurance Group Holdings L.P., an insurance and reinsurance business launched in Apr 2015. Pursuant to the deal, Phoenix will be purchased by Nassau for a total consideration of $217.2 million, or $37.50 per share. This represents a 188% premium over its closing price of $13.03 per share as on Sep 28, 2015.

The acquisition is pending regulatory and shareholders' approval and is slated to complete by early 2016. Post acquisition, Nassau will contribute $100 million in new equity capital to strengthen Phoenix's balance sheet and enhance its capital strength. Notably, Phoenix's GAAP equity including AOCI was $199.2 million, while GAAP equity excluding AOCI was $464.4 million as of Jun 30, 2015. The company also had total statutory surplus of $817.3 million in the same period. The company will function as a wholly owned subsidiary of Nassau but will retain its headquarter at Hartford, CT.

Per Phoenix's management, the deal is in the best interest of the company as well as its shareholders. This is because the transaction offers significant premium to its shareholders, while the additional capital from Nassau will further support Phoenix and its subsidiaries in attaining long-term growth.

As for Nassau, this acquisition marks its first life insurance acquisition. The company expects to make Phoenix its U.S. life and annuity platform, going ahead.

Post the signing of the agreement, credit rating giant, A. M. Best placed the "b" issuer credit rating (ICR) of Phoenix, the "b" issue ratings of its 7.45% senior bonds, and "b+" issue ratings of its 7.15% surplus notes under review with developing implications. Also, the financial strength rating (FSR) of "B" and ICR of "bb+" of its insurance subsidiaries have been placed under review with developing implications.

Phoenix currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks from the insurance space are Assured Guaranty Ltd. AGO , Primerica, Inc. PRI , and Sun Life Financial Inc. SLF . While Assured Guaranty sports a Zacks Rank #1 (Strong Buy), Primerica and Sun Life hold a Zacks Rank #2 (Buy).

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ASSURED GUARNTY (AGO): Free Stock Analysis Report

PRIMERICA INC (PRI): Free Stock Analysis Report

SUN LIFE FINL (SLF): Free Stock Analysis Report

PHOENIX CMPNIES (PNX): Free Stock Analysis Report

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


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

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