CF Corp (CFCO.O), a blank check company founded by veteran dealmaker Chinh Chu, said it would buy U.S. annuities and life insurer Fidelity & Guaranty Life (FGL.N) in an all-cash deal valued at about $1.84 billion.
FGL shares hit a record high of $30.65 in trading on Wednesday, while shares of CF Corp rose about 2 percent to $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 [ANBANG.UL] for $1.6 billion.
CF Corp's offer of $31.10 per share is at an 8.4 percent premium to FGL's Tuesday close of $28.70. CF Corp will also assume $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.
The investor group, including Chinh Chu, William Foley, funds affiliated with Blackstone Group LP (BX.N) and Fidelity National Financial Inc (FNF.N), will put in about $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.
Foley is the non-executive chairman of the board of U.S. 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 deal, FGL maybe required to pay $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.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Martina D'Couto)