(Reuters) - American Equity Investment Life Holding Co (N:AEL) said on Sunday that it entered into a strategic partnership with Brookfield Asset Management Inc (TO:BAMa) and rejected an unsolicited acquisition proposal from Athene Holding Ltd (N:ATH) and Massachusetts Mutual Life Insurance Co.
Canadian private equity firm Brookfield is taking a 19.9% stake in American Equity at $37 per share for an initial investment, the company said in a statement https://refini.tv/3o2vkhI.
Brookfield is purchasing its American Equity shares in two installments, the first at a price of $37 per share and the second at a variable price where the floor is $37 a share.
It will also reinsure up to $10 billion of American Equity fixed index annuity liabilities.
Brookfield will also receive a board seat on American Equity following the initial investment.
The board of American Equity rejected the unsolicited acquisition proposal from Athene and MassMutual made public on Oct. 1, saying it significantly undervalued the company. That deal was valued at more than $3 billion.
"Since the board of directors of American Equity has decided to reject our joint proposal, we will continue with the execution of our standalone strategy," Athene Holdings said in response to the rejection.
The American Equity board has also authorized the share repurchase of up to $500 million of common shares to be funded with the proceeds of the Brookfield equity investment and cash on hand, the company said.
The repurchase is expected to offset dilution from the issuance of common shares to Brookfield, the company added.