Federal Probe Into Mark Walter's Insurers Threatens $4.1B Brighthouse Deal
BHF sits 23% above its 52-week low of $42.07.
Summary
A federal investigation into Mark Walter's use of life insurers to finance his other businesses is casting doubt on Aquarian Holdings' planned $4.1 billion acquisition of Brighthouse Financial. Brighthouse shares have fallen about 20% since late July when the probe was first reported, and the Delaware insurance regulator's unusual public statement about its review has added to investor anxiety that the deal could be blocked or saddled with conditions. Aquarian has no business relationship with Walter's companies, but the scrutiny of private-fund ownership of insurers is raising broader questions about the deal's regulatory risk. Analysts note the deal already carried above-average risk due to Brighthouse's captive reinsurer and potential capital requirements. Watch for Delaware's final decision on the merger, which could trigger Aquarian's walk-away rights if conditions are imposed.
At the time of this announcement, BHF was trading at $51.87 on NASDAQ in the Finance sector, with a market capitalization of approximately $3B. The 52-week trading range was $42.07 to $66.80. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.