Investors booked their quick profits on the company’s equity, following a credible report last week that it was about to be sold.
Brighthouse Financial‘s (BHF 6.12%) stock price dove by more than 6% on Monday, but this was more for what didn’t happen with the insurance company than what actually transpired. The insurer’s decline came on a day when the S&P 500 index landed (barely) in positive territory, with an almost 0.2% rise.
A big “For Sale” sign
Brighthouse has apparently been aiming to sell itself to an outside party since at least the start of this year. Last week, that effort seemed to be bearing fruit, as the Financial Times reported on Thursday that a suitor had been found.
Image source: Getty Images.
According to the financial newspaper’s reporting, which cited three unnamed people “briefed on the matter,” investment firm Aquarian Holdings was in advanced talks to acquire Brighthouse. This take-private deal was valued at $4 billion, filtering down into as much as $70 per share for the insurer’s equity.
The article’s sources cautioned that the transaction hadn’t been formally agreed, and there was no guarantee that it would be.
Today’s Change
(-6.12%) $-3.50
Current Price
$53.58
Key Data Points
Market Cap
$3B
Day’s Range
$51.08 – $54.79
52wk Range
$42.07 – $64.12
Volume
2.4M
Avg Vol
1.2M
Gross Margin
0.00%
Dividend Yield
N/A
Impatient investors
That price was a healthy premium to Brighthouse’s level at the time, so it was little wonder that investors piled into the stock the following day. As often happens with sudden situational increases like that, however, many shareholders subsequently (and quickly) sold out of their shares to reap an easy profit. In the absence of any confirmation of a deal, other investors moved on to different opportunities.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.