This Insurance Company Agreed to Be Taken Private. Investors Don’t Like the Deal
- July 29, 2024
Key Takeaways
- Shares of insurance company Enstar fell Monday after it agreed to be acquired by Sixth Street for $5.1 billion, or $338 per share.
- The per-share price is less than Enstar’s closing price on Friday.
- Former Treasury Secretary Steven Mnuchin’s firm, Liberty Strategic Capital, is part of the group that agreed to acquire Enstar.
Insurance company Enstar Group ( ESGR ) is going private. Investors don’t like the deal.
Enstar on Monday said it agreed to be taken private through a $5.1 billion acquisition led by investment firm Sixth Street. Also participating: Liberty Strategic Capital, former Treasury Secretary Steven Mnuchin’s firm.
The sale price, $338 per share, represents a more than 8% premium to Enstar’s volume-weighted average price over the past 90 days, according to the announcement. But it’s also discount to Enstar’s Friday close of $348.31. That helped pull Enstar’s shares lower Monday, with the stock recently down more than 6% to below $323.
“We believe this is the best next step for our shareholders,” Enstar CEO Dominic Silvester said in a statement.
Enstar also announced its second quarter results Monday morning. The company reported net income of $126 million, or diluted earnings per share of $8.49, up from $21 million, $1.34 per share, in the year-ago quarter.