Phoenix Hits It Big With Buyout Agreement

Banking, finance, and taxes

Published: September 29, 2015 2:38 pm

Last Updated: April 28, 2020 3:37 am

Phoenix Companies Inc. (NYSE: PNX) made waves in the market on Tuesday afternoon as one of the biggest winners on the day from some M&A action. The company announced that it entered into a definitive agreement with Nassau Reinsurance Group to be acquired for $37.50 per share in cash, a total value of $217.2 million. The purchase price represents a 188% premium over Monday’s closing stock price of $13.03.

The transaction is expected to be completed in early 2016. However the transaction is still subject to approval by Phoenix shareholders and regulatory authorities.

For some background, Phoenix helps financial professionals provide solutions, including income strategies and insurance protection, to families and individuals planning for or living in retirement.

After the transaction is completed, Nassau will contribute $100 million in new equity capital into Phoenix to further stabilize and improve Phoenix’s balance sheet as well as providing growth capital. At the same time, Phoenix will be a privately held, wholly owned subsidiary of Nassau.

James D. Wehr, president and CEO of Phoenix, said:

After considering various strategic alternatives, Phoenix’s Board of Directors initiated a thorough process and, in conjunction with our financial and legal advisors, determined a transaction with Nassau was in the best interests of Phoenix and our shareholders. The transaction provides a significant premium to Phoenix shareholders, and the additional capital provided by Nassau will make Phoenix and its subsidiaries financially stronger and well-positioned for the long term, to the benefit of policyholders and other key constituents. We look forward to working closely with Nassau to close this transaction. Nassau’s founders bring substantial resources and proven experience managing insurance companies and are committed to maintaining our 164-year legacy of meeting customers’ financial needs.

Shares of Phoenix were up 151% at $32.70 on Tuesday afternoon. The stock has a consensus analyst price target of $21.00 and a 52-week trading range of $11.12 to $70.92.

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