Retirement services firm Athene and life insurer MassMutual have submitted a proposal to the board of American Equity Investment Life Holding Company to purchase all of the company’s outstanding common shares for a total consideration of around $3 billion.
The unsolicited proposal is currently being reviewed by American Equity’s board.
The proposal to purchase American Equity, an issuer of fixed index annuities, values it at $36 per share.
MassMutual would acquire all of the insurance operations and personnel of American Equity and Athene would reinsure 80% of the in-force policyholder liabilities.
In connection with the reinsurance transaction, approximately two-thirds of the capital for the transaction would be provided by Apollo/Athene Dedicated Investment Program through Athene Co-Invest Reinsurance Affiliate 1A Ltd., with the remaining one-third provided by Athene.
Athene does not currently expect to use excess equity capital for the reinsurance transaction given that Athene would assume the outstanding American Equity preferred securities, the aggregate amount of which is in excess of Athene’s expected capital contribution for the reinsurance transaction.
Athene has structured and underwritten its reinsurance proposal consistent with targeted returns for recent inorganic growth transactions, taking into account expected portfolio redeployment on assets transferred as part of the transaction.
