Most people do their best not to do too much work on the weekends. But in the investment banking world, the best time to finalize potential mergers or acquisitions is over the weekend, as markets aren't open and companies don't have to worry about the potential for leaked information to cause an immediate spike in share prices. Indeed, one reason there are many references to "Merger Monday" is that the weekend efforts of mergers and acquisitions professionals so often bear fruit by the beginning of the work week.
Yet mergers don't have to take place on Monday, and a couple of stocks are proving that point early Tuesday. Both American Equity Investment Life Holding (NYSE: AEL) and Stratasys (NASDAQ: SSYS) are seeing their shares move sharply higher after getting buyout interest from prospective acquirers, and shareholders seem excited about the prospects. Below, you'll get more details on what the companies have announced about their acquisitions.
Brookfield makes its move for American Equity Investment Life
Shares of American Equity Investment Life were up 17% in Tuesday-morning trading. The provider of insurance products got a buyout bid from Brookfield Reinsurance (NYSE: BNRE) in a bid that will, if accepted, further the trend toward consolidation in the insurance industry.
American Equity acknowledged that it had received Brookfield Re's acquisition proposal, outlining its terms. Under the deal, Brookfield Re would pay $38.85 per share in cash as well as shares of Brookfield Asset Management (NYSE: BAM) that would bring the total value to $55 per share based on recent stock prices. A collar arrangement would potentially result in variations in the number of Brookfield Asset Management shares issued to American Equity shareholders, but the total value would be between $54 and $56.50 per share at the closing of the transaction.
For its part, American Equity said it would review the proposal but offer no further comment until that review is complete. The life insurance and annuity company emphasized that shareholders shouldn't assume that the two entities will be able to reach a final agreement. Interestingly, the move comes less than a year after Brookfield Re CEO Sachin Shah resigned from the American Equity board due to disagreements about its strategic direction.
This isn't the first offer that American Equity has received, as it rejected a $4 billion bid from private equity company Elliott Management earlier this year. With this bid valuing American Equity at $4.3 billion, there's a somewhat greater chance of its going through, but shareholders shouldn't count it as a done deal at this point.
3D-printing stocks seek to combine forces
Elsewhere, shares of Stratasys climbed 7%. The 3D printing company has already been the subject of takeover efforts, but it now finds itself in a bidding war of sorts.
Stratasys said early Tuesday that it had received a revised acquisition proposal from 3D Systems (NYSE: DDD). The new terms involve paying Stratasys $7.50 per share in cash and also receiving 1.3223 shares of 3D Systems stock per share. Based on 3D Systems' recent share price, that works out to a total value of between $19.50 and $20 per Stratasys share.
Meanwhile, Nano Dimension (NASDAQ: NNDM) has looked to solicit responses to a tender offer, as it aims to buy a minority stake in Stratasys. Nano also changed its terms on Tuesday, boosting its price to $20.05 per share from $18 but reducing the portion of the company it wants to purchase to a stake of between 31.9% and 36.9% of outstanding shares. Stratasys had urged shareholders not to accept the previous Nano tender offer, as it would have given Nano enough total shares for effective control of the company while failing to offer a full merger to remaining minority shareholders.
Shares of Stratasys and its peers remain well below their best levels in the mid-2010s, and consolidation likely makes sense. Combining 3D Systems and Stratasys has seemed like a natural move for years, and it'll be interesting to see if the two companies make any progress toward finalizing a deal.
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Dan Caplinger has positions in Brookfield Asset Management and Brookfield Reinsurance. The Motley Fool has positions in and recommends Brookfield Asset Management and Brookfield Reinsurance. The Motley Fool recommends 3d Systems. The Motley Fool has a disclosure policy.
