FGL Holdings to be acquired by Fidelity National for $12.50 per share
FGL Holdings (FG) announced that the company has entered into a merger agreement pursuant to which Fidelity National Financial (FNF) will acquire F&G for $12.50 per share, representing an equity value of approximately $2.7B.
The transaction was approved by a Special Committee of F&G Directors, a Special Committee of FNF Directors and the FNF board.
Under the terms of the merger agreement, holders of F&G’s ordinary shares (other than FNF and its subsidiaries) may elect to receive either $12.50 per share in cash or 0.2558 of a share of FNF common stock for each ordinary share of F&G they own.
FGL Holdings sells individual life insurance products and annuities in the United States. The company offers deferred annuities, including fixed indexed annuity contracts and fixed rate annuity contracts; immediate annuities; and life insurance products. It also provides reinsurance on asset intensive, long duration life, and annuity liabilities, such as fixed, deferred and payout annuities, long-term care, group long-term disability, and cash value life insurance.
This is subject to an election and proration mechanism such that the aggregate consideration paid to such holders of F&G’s ordinary shares will consist of approximately 60% cash and 40% FNF common stock. Upon closing of the transaction, F&G shareholders will own approximately 7% of the outstanding shares of FNF common stock.
This represents a premium of 28% to F&G’s 60-day volume-weighted average price and a premium of 17% to F&G’s all-time high closing stock price following its combination with CF Corp. of $10.70 prior to February 6, when the media reported a potential transaction.
FNF currently owns 7.9% of F&G’s outstanding ordinary shares and all of F&G’s Series B Preferred shares, and, in connection with and immediately prior to the closing of the proposed acquisition, will acquire all outstanding F&G Series A preferred shares, with a face value of approximately $321 million as of December 31, 2019. Including the assumption of F&G’s $550 million of senior notes due 2025, FNF’s pro forma debt to total capital is expected to be approximately 26% at the close of the transaction.
The transaction is expected to close in the second or third quarter of 2020, subject to the satisfaction of customary closing conditions, including the receipt of regulatory clearances and approval by F&G shareholders.
Following the close of the transaction, F&G will operate as a subsidiary of FNF. F&G is expected to remain headquartered in Des Moines, Iowa, and will continue to be led by Chris Blunt and F&G’s current management team.
The terms of the merger agreement provide that F&G will be permitted, with the assistance of its legal and financial advisors, to actively solicit alternative acquisition proposals from third parties during a 40-day “go-shop” period from the date of the merger agreement until Wednesday, March 18, 2020.
F&G may terminate the merger agreement to enter into a superior proposal with specified bidders identified in this period for a termination fee of $39.97M, subject to the terms and conditions of the merger agreement.
There is no guarantee that the “go-shop” process will result in any alternative acquisition proposal or that any alternative acquisition proposal will be identified at any time, or approved or completed.
F&G does not intend to disclose developments with respect to the “go-shop” process unless and until F&G’s Special Committee and/or F&G’s board makes a determination requiring further disclosure.
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