Fidelity & Guaranty Life (FGL)

[Enterprising Investor]

Heads, You Win; Tails, You Still Win (2/07/17)

Summary

•Two ways to win with FGL.

•Google plots China return.

•First Busey buys First Community.

Welcome to the Flippin' issue of M&A Daily

Fidelity & Guaranty Life

First, the bad news: It is quite likely that the current Anbang acquisition of Fidelity & Guarantee Life (NYSE:FGL) will break. The definitive merger agreement is for a $26.80 cash deal. There is a $0.71 arb spread. The buyer has been stymied in its regulatory process and does not appear to be making much effort at getting unstuck.

The good news: Shares are currently available for about $26 per share. This is a substantial discount to their standalone value. It is also a substantial discount to what spurned suitors are willing to pay. Shareholders, including me - and, infinitely more importantly, HRG (NYSE:HRG) - are ready for a sale.

This is my favorite insurer for 2017. If there is no deal, it should trade above $27 per share. If there is an alternative deal, it should do even better. We just have to own it and wait. This is the opposite of being stuck between a rock and a hard place. We are stuck between a value investment and catalysts that could unlock that value.

[...]

http://seekingalpha.com/article/4043444-heads-win-tails-still-win