What Happened?

Shares of insurance and annuity provider Brighthouse Financial (NASDAQ: BHF) jumped 27.3% in the morning session after the company announced it agreed to be acquired by an affiliate of Aquarian Capital LLC in an all-cash deal. The transaction valued Brighthouse at approximately $4.1 billion, with shareholders set to receive $70.00 for each share. This price represented a significant premium of 37.7% over the company's 90-day volume-weighted average price. According to the agreement, Brighthouse Financial was expected to operate as a standalone entity within Aquarian Capital's portfolio, keeping its current leadership and headquarters. Following the news of the acquisition, Brighthouse canceled its previously scheduled conference call that was meant to discuss its third-quarter financial results.

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What Is The Market Telling Us

Brighthouse Financial’s shares are very volatile and have had 21 moves greater than 5% over the last year. But moves this big are rare even for Brighthouse Financial and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 6 days ago when the stock gained 27.8% on the news that reports revealed that Aquarian Holdings was in advanced talks to acquire the U.S. life insurer in a take-private deal. According to a Financial Times report, the potential deal valued Brighthouse at $4 billion, with Aquarian considering a payment of up to $70 per share. The report, which cited people briefed on the matter, also noted that a deal could be announced soon. News of the possible acquisition was backed by the mention that Mubadala Capital, which invested in Aquarian the previous year, was expected to provide equity funding for the transaction.

Brighthouse Financial is up 36.7% since the beginning of the year, and at $65.59 per share, has set a new 52-week high. Investors who bought $1,000 worth of Brighthouse Financial’s shares 5 years ago would now be looking at an investment worth $2,081.

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