American Equity rejects offer from Prosperity and Elliott

American Equity Investment Life Holding Co. has rejected a $45 per-share offer from rival insurer Prosperity Life Insurance Group and Elliott Investment Management. 

American Equity rejected the all-cash offer twice, first on Dec. 12 and again on Tuesday, according to a statement, confirming a Bloomberg News report. The hedge fund Elliott is Prosperity’s principal shareholder. 

“The board has carefully evaluated Prosperity and Elliott’s opportunistic proposal and unanimously determined that it significantly undervalues the company,” David S. Mulcahy, American Equity’s chairman, said in a statement. 

Representatives for Prosperity Life and Elliott declined to comment. 

American Equity rose 7% to close at $43.12 at in New York trading Tuesday, giving the company a market value of about $3.7 billion. 

The company, which sells annuities and other insurance products, has long been a takeover candidate, drawing a takeover bid more than two years ago from Massachusetts Mutual Life Insurance Co. and Athene Holding Ltd. American Equity averted that deal by selling a stake to Brookfield Asset Management Inc., which remains its largest shareholder. 

In recent months, Brookfield has been feuding with the company over its investment decisions and strategic direction, spurring analyst speculation that American Equity could be in play again. 

Paul Singer’s Elliott and Wand Partners Inc. were among investors that bought Prosperity Life in 2018, as investment firms pushed into the US insurance market. 

Ardea Partners, JPMorgan Chase & Co. and Sullivan & Cromwell are advising American Equity.