Analyst Predicts Completion Of American Equity's $4.3B Acquisition At Current Offer Price

Truist Securities analyst Mark Hughes downgraded American Equity Investment Life Holding Co AEL to Hold from Buy at an increased price target of $55 (from $49).

The analyst expects AEL's acquisition by Brookfield Reinsurance Ltd BNRE to be completed at the current offer price and assumes the unlikely emergence of another buyer. 

Earlier this month, ARE accepted BNRE's previously disclosed acquisition offer priced at ~$4.3 billion.

As per the terms, AEL shareholders will receive $55.00 per AEL share, consisting of $38.85 in cash and 0.49707 of Brookfield Asset Management Ltd. BAM, having a value equal to $16.15.

The proposal represents a premium of 35% to the closing price as of June 23, 2023, and a 42% premium to the 90-day volume-weighted average price for the AEL shares.

Hughes estimates EPS of $6.30 (vs. consensus of $6.14) in 2023 and $6.70 (vs. consensus of $6.59) in 2024. 

Also Read: American Equity Investment Reports $2B Q2 Sales Aided By Fixed Index Annuities

Price Action: AEL shares are trading higher at 0.07% at $53.38 on the last check Friday.