Athene Closes Presidential Life Acquisition for $414M
January 4, 2013 by Fran Matso Lysiak
| Fran Lysiak |
A unit of the Bermuda-based Athene Holding Ltd. has closed on its acquisition of Presidential Life Corp. in a transaction valued at about $414 million.
Last summer, Athene Annuity & Life Assurance Co., a Delaware-domiciled insurer, said it would acquire the Nyack, N.Y.-based Presidential Life (NASDAQ: PLFE) for $14 a share cash, which represented a premium of about 38% over the $10.14 a share closing price of Presidential Life’s stock on July 12, 2012, the last trading day before the announcement (Best’s News Service, July 16, 2012).
In a joint statement on the closing, the companies said letters of transmittal allowing Presidential Life stockholders of record to deliver their shares to the paying agent in exchange for payment of the merger consideration will be distributed quickly.
The acquisition gives Athene Annuity “a presence in all 50 states and creates significant opportunities for growth in our retail sales and reinsurance operations,” said James R. Belardi, chief executive officer of Athene, in a statement. “We continue to build a market-leading retirement savings company through a combination of organic growth, reinsurance and strategic acquisitions.”
Athene Holding was formed in 2008 by Belardi, formerly president of SunAmerica Life Insurance Co. and chief investment officer of AIG Retirement Services Inc., and Chip Gillis, former head of Bear Stearns’ Insurance Solutions Group, and was sponsored by an affiliate of Apollo Global Management LLC (NYSE: APO) to provide tax-efficient savings products to support retiring baby boomers.
Meanwhile, the London-based Aviva plc recently agreed to sell its U.S. life and annuity business, Aviva USA Corp., to Athene Holding Ltd. for $1.8 billion. Aviva plc will retain Aviva Investors, the company’s North American asset management business (Best’s News Service, Dec. 21, 2012).
The products offered by Athene Holding, through its subsidiaries, include retail fixed and indexed annuities; institutional products such as funding agreements; and co-insurance and reinsurance arrangements with third-party life insurance and annuity providers. Its other principal subsidiaries include Athene Life Insurance Co., also domiciled in Delaware, and Athene Life Re Ltd., a Bermuda-based reinsurer. Presidential Life Insurance Co. sells fixed annuities, life insurance and accident and health insurance.
With the closing of the transaction, Presidential Life’s common shares will stop trading on NASDAQ and will be delisted.
Early last year, Liberty Life Insurance Co. changed its legal name to Athene Annuity & Life Assurance (Best’s News Service, Feb. 2, 2012), which aligned the company more closely with its Bermuda-based parent, Athene Holding, which acquired Liberty Life from Royal Bank of Canada in April 2011.
Before that, in May 2011, A.M. Best Co. had downgraded the financial strength rating to B++ (Good) from A- (Excellent) and the issuer credit rating to “bbb+” from “a-” of Liberty Life Insurance Co. The rating actions followed the previously announced acquisition of Liberty Life by Athene Holding Ltd. from the Royal Bank of Canada. As part of this transaction, substantially all of the life/health business of Liberty Life was to be coinsured to Protective Life Insurance Co. and a portion of Liberty Life’s annuities was to be coinsured to Athene Life Re, a Bermuda-domiciled operating company of Athene Holding (Best’s News Service, May 4, 2011).
(By Fran Matso Lysiak, senior associate editor, BestWeek: fran.lysiak@ambest.com)
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(c) 2013 A.M. Best Company, Inc. |
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A.M. Best Company, Inc. |
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