Is Brighthouse Financial Yesterday's News?

• Aquarian Capital announced successful November that it plans to get Brighthouse for $4.1 billion.

• The woody comes aft Brighthouse had agelong been rumored to beryllium an acquisition target.

• There is simply a imaginable accidental for merge arbitrage.

• 10 stocks we similar amended than Brighthouse Financial ›

The security steadfast Brighthouse Financial (NASDAQ: BHF) had agelong been rumored to beryllium a takeover target. In November, that rumor became a reality.

Aquarian Capital, a backstage equity steadfast backed by Abu Dhabi's sovereign wealthiness fund, announced successful aboriginal November that it would acquisition Brighthouse successful an all-cash transaction valued astatine $4.1 billion. The woody is valued astatine $70 per stock and represented a astir 38% premium to Brighthouse's 90-day volume-weighted mean terms arsenic of Nov. 5.

Brighthouse was spun retired from the security steadfast MetLife successful 2017 and is 1 of the largest annuity and beingness security companies successful the U.S. However, successful caller years, inconsistent returns and declining superior levels person led galore investors to expect an acquisition.

Aquarian said it volition assistance Brighthouse prosecute strategical maturation opportunities and amended service its customers, organisation partners, and different stakeholders. Aquarian plans to put successful the company's level and organisation franchise, arsenic good arsenic heighten the company's concern absorption infrastructure.

Following Aquarian's acquisition, which is expected to adjacent sometime successful 2026, Brighthouse volition beryllium taken backstage but proceed to run arsenic a abstracted entity. Aquarian owns respective different security brands, including Investors Heritage, Hudson Life, Somerset Reinsurance, and Via Management Solutions.

With Aquarian's announced acquisition, is Brighthouse yesterday's news?

As mentioned above, Brighthouse is being acquired for $70 per share. As of this writing, the banal traded somewhat beneath $65 per share. This means that investors person immoderate uncertainty regarding the imaginable for the acquisition to close. It besides presents an accidental for merger arbitrage. This script occurs erstwhile the banal trades beneath the acquisition terms pursuing an acquisition announcement.

This offers investors a accidental to analyse the regulatory dynamics down the woody and find whether the acquisition volition close. If investors comprehend a precocious likelihood of the woody closing, they volition acquisition the stock. At existent levels, there's a astir 7.5% dispersed betwixt Brighthouse's banal terms and the acquisition value.

Given that Aquarian is backing the woody with committed financing that doesn't necessitate taking connected further debt, the acquisition seems to person a precocious likelihood of closing.