Insurer Presidential Life Corp. (PLFE) Friday agreed to be acquired by an unit of Bermuda-based Athene Holding Ltd. for $14.00 per share in cash or a total of about $415 million. Upon closing, Presidential Life will survive as a wholly owned unit of Athene Annuity.
The news had a salubrious impact, as shares of Presidential Life gapped open sharply higher on strong volumes. Currently the shares are up more than 36 percent on the Nasdaq.
Athene's $14.00 per share offer represents a premium of about 38 percent over Presidential Life common stock's closing price on July 12.
New York-based Presidential Life, through its unit, Presidential Life Insurance Co., engages in the sale of fixed annuity, life and health insurance products in the U.S. Athene said the acquisition will create huge opportunities for growth in its retail sales and reinsurance operations.
Athene will effect the acquisition through its unit Athene Annuity & Life Assurance Co. - a Delaware-domiciled insurer focused on retail fixed and index annuity sales and reinsurance. Athene Annuity does not currently operate in New York.
The Board of Presidential Life has unanimously approved the transaction and recommends that its shareholders approve the merger agreement. The transaction is expected to close in late 2012. It is subject to approval by the holders of a majority of the outstanding common shares of Presidential Life.
"We believe this transaction is in the best interest of our shareholders," said John McMahon, chairman of the Board of Presidential Life.
Sandler O'Neill + Partners, L.P. acted as the financial advisor to Presidential Life and provided a fairness opinion to the Board, while Proskauer Rose LLP acted as counsel. Sidley Austin LLP acted as counsel to Athene.
PLFE is trading at $13.85, up $3.71 or 36.59%, on a volume of 2.4 million shares on the Nasdaq.
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