FGL Scraps $1.6 Billion Anbang Deal, Says Others Are Interested

Anbang had struggled to win regulatory approval

(Photo: Thinkstock) (Photo: Thinkstock)

(Bloomberg) — Fidelity & Guaranty Life terminated its $1.6 billion agreement to be purchased by China’s Anbang Insurance Group Co. and said it will weigh other possible deals.

FGL’s board “is continuing to evaluate strategic alternatives to maximize shareholder value and has received interest from a number of parties,” the company said Monday in a statement. “FGL has no remaining obligations under the merger agreement and may enter into an alternative transaction.”

(Related: FGL falls after Anbang withdraws N.Y. request to buy life insurer)

The U.S. insurer agreed in 2015 to the Anbang deal at a price of $26.80 a share. But Anbang struggled to win regulatory approval, and valuations of U.S. life insurers climbed, giving Des Moines, Iowa-based FGL incentive to find a new buyer. Under terms of a February amendment, FGL was permitted to cancel the agreement Monday. Athene Holding Ltd., the annuity seller with ties to Apollo Global Management LLC, has been weighing a plan to pursue FGL, people familiar with the plan said in February.

“We believe Athene is the favorite to buy FGL, assuming the Anbang deal breaks,” analysts led by Ryan Krueger at Keefe Bruyette & Woods said in a note to clients Sunday.

FGL’s stock has been trading above the deal price for weeks, closing at $27.95 Monday. The insurer is majority owned by HRG Group Inc., a holding company that counts Leucadia National Corp. as its top shareholder.

Canceled Deals

Anbang hasn’t followed through recently with plans for major expansion in the U.S. A year ago, a group led by Anbang withdrew a $14 billion takeover for Starwood Hotels and Resorts Worldwide Inc., citing “various market considerations.” Last October, Anbang called off a deal to buy a landmark Southern California hotel from Blackstone Group LP after U.S. national security officials expressed concern over the property’s proximity to a naval base.

Last month, Anbang abandoned talks with the family of Jared Kushner, President Donald Trump’s son-in-law and a White House special adviser, to redevelop a Manhattan office tower, after lawmakers cited potential conflicts of interest. A representative for Anbang didn’t immediately return a message seeking comment Monday.

--- Read Insurance M&A may continue amid some ‘patchy’ results, S&P says on ThinkAdvisor.

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