American Equity Investment Life Holding Co. rejected an offer from rival insurance company Prosperity Life Insurance Group and Elliott Investment Management at $45 per share.
According to a statement confirming the Bloomberg News report, American Equity rejected the all-cash offer twice, first on December 12 and again on Tuesday. Elliott hedge fund is the main shareholder of Prosperity.
“The Board of Directors carefully evaluated the opportunistic proposal by Prosperity and Elliott and unanimously decided that it significantly undervalues the company,” American Equity Chairman David Mulcahy said in a statement.
Representatives for Prosperity Life and Elliott declined to comment.
American Equity rose 7% to close in New York trading on Tuesday at $43.12, giving the company a market value of about $3.7 billion.
The company, which sells annuities and other insurance products, has long been a takeover candidate, having received a takeover bid more than two years ago from Massachusetts Mutual Life Insurance Co. and Athene Holding Ltd. American Equity prevented this deal by selling the Brookfield stake. Asset Management Inc., which remains its largest shareholder.
In recent months, Brookfield has feuded with the company over its investment decisions and strategic direction, prompting analyst speculation that American Equity could be back in the game.
Elliott and Wand Partners Inc. Paul Singer were among the investors who bought Prosperity Life in 2018 as investment firms entered the US insurance market.
Ardea Partners, JPMorgan Chase & Co. and Sullivan & Cromwell advise American Equity.