Group Including Steven Mnuchin in Pact to Acquire Enstar Group
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 a 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.
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Enstar Group Agrees to Acquisition by Sixth Street
Enstar Group, an insurance company, has recently agreed to be acquired by Sixth Street for $5.1 billion. The deal, led by investment firm Sixth Street, also includes participation from Liberty Strategic Capital, the firm owned by former Treasury Secretary Steven Mnuchin. While the sale price of $338 per share represents an 8% premium to Enstar’s volume-weighted average price over the past 90 days, it is lower than the company’s closing price on Friday, which was $348.31. As a result, Enstar’s shares fell more than 6% to below $323 on Monday.
Investors React Negatively to the Deal
Investors have expressed their dissatisfaction with the acquisition deal, leading to a decline in Enstar’s stock price. The lower per-share price compared to the Friday closing price has contributed to this negative sentiment. Enstar’s shares fell more than 6% on Monday, reflecting the market’s disappointment with the deal. However, Enstar CEO Dominic Silvester believes that going private is the best decision for the company’s shareholders.
Enstar’s Second Quarter Results
In addition to the acquisition announcement, Enstar also released its second-quarter results. The company reported net income of $126 million, a significant increase from $21 million in the year-ago quarter. Diluted earnings per share also rose from $1.34 to $8.49. These positive financial results indicate the company’s strong performance and potential for growth, despite the negative market reaction to the acquisition deal.
Implications of the Acquisition
The acquisition of Enstar Group by Sixth Street has significant implications for both companies involved. For Enstar, going private means a change in ownership structure and potentially a shift in strategic direction. The involvement of Liberty Strategic Capital, led by former Treasury Secretary Steven Mnuchin, adds further interest to the deal. It remains to be seen how this acquisition will impact Enstar’s operations and future growth prospects.
Conclusion
The agreement between Enstar Group and Sixth Street for a $5.1 billion acquisition has generated mixed reactions from investors. While the sale price represents a premium to Enstar’s average price over the past 90 days, it is lower than the company’s closing price on Friday. This has led to a decline in Enstar’s stock price. However, Enstar’s strong second-quarter results indicate the company’s potential for growth. The involvement of Liberty Strategic Capital, owned by former Treasury Secretary Steven Mnuchin, adds further intrigue to the deal. The acquisition will have significant implications for Enstar’s future as it transitions to a private company under new ownership.
