US insurer Fidelity bought by group led byAsian-American for US$1.84 billion

PUBLISHED : Thursday, 25 May, 2017, 1:42am
UPDATED : Thursday, 25 May, 2017, 1:42am

CF Corp, a blank check company founded by veteran dealmaker Chinh Chu, said it would buy US annuities and life insurer Fidelity & Guaranty Life in an all-cash deal valued at about US$1.84 billion.

The investor group, including Chinh Chu, William Foley, funds affiliated with Blackstone Group LP and Fidelity National Financial Inc, will put in about US$900 million to fund the deal.

Chu, who fled his native country Vietnam with his family in 1975 at the age of eight, is a former Blackstone dealmaker and has worked on some of the company’s biggest and most successful leveraged buyouts.

FGL shares hit a record high of US$30.65 in trading on Wednesday, while shares of CF Corp rose about 2 per cent to US$10.20.

The deal comes a little over a month after FGL terminated its agreement to be acquired by China’s Anbang Insurance Group Co Ltd for US$1.6 billion. CF Corp’s offer of US$31.10 per share is at an 8.4 per cent premium to FGL’s Tuesday close of US$28.70. CF Corp will also assume US$405 million in FGL’s debt.

CF Corp, a special purpose acquisition company which went public in May 2016, is a company with no assets that raises money in an IPO which it uses, often alongside debt, to buy other companies.

Foley is the non-executive chairman of the board of US title insurance services provider Fidelity National Financial.

The deal is expected to close in the fourth quarter of 2017, subject to shareholder and regulatory approvals. In case of termination of the deal, FGL maybe required to pay US$50 million to CF Corp.

Bank of America Merrill Lynch and FT Partners provided financial advice to CF Corp on the deal. Credit Suisse was the lead financial adviser to FGL and Jefferies acted as its co-financial adviser.