Global re/insurer AXA has further reduced its stake in its US life insurance business, AXA Equitable Holdings (EQH), with the sale of 40 million shares to Morgan Stanley and Barclays.
AXA has also granted the underwriters a 30-day option to purchase up to an additional 6,000,000 shares of EQH’s common stock.
The announcement follows on from an earlier sale in March 2019, when AXA offloaded 76 million shares in EGH, decreasing its ownership from 60.1% to 48.3% and raising $1.5 billion in net proceeds.
While the price of the latest sale has not been officially disclosed, Bloomberg cites the deal value at a price of $20.95 per share, representing a modest discount to the price of $21.00 per share as of June 4.
Analysts at J.P. Morgan Cazenove estimate that AXA stake in EQH will now be around 40.1%, or around 33% excluding the $750 million mandatory convertible.
They also peg net proceeds from the transaction at €700 million (US $790 million), which, combined with the proceeds from the previous sale, bring total net proceeds year to date to €2.0 billion ($2.3 billion).
So far AXA has used just $325m to reduce debt, but J.P. Morgan suggests that if the total proceeds were applied to debt reduction, it would reduce AXA leverage from 31% to 27%.
“We believe this would be a major step toward returning to the investment mainstream and toward a rerating of AXA,” the firm stated.