Phoenix finalizes merger with private equity-backed reinsurer

Under the terms of the deal, Phoenix will remain as the surviving company, displacing Davero as a wholly owned subsidiary of Nassau. According to a Phoenix press statement, the parties are "actively working towards closing, and the transaction remains on track to close in early 2016." In addition to Phoenix stockholder approval, the merger deal is subject to regulatory approvals and other closing conditions.

Upon the close, Phoenix stockholders will be entitled to receive $37.50 in cash, without interest, for each share of common stock (par value $0.01 per share) they own immediately prior to the effective time of the merger.

The pact follows dismal financial results that Phoenix announced last August. A near-repeat of the company's performance for the same period in 2014, Phoenix posted a loss for the quarter ended June 30 of $22.6 million ($3.93 million per share). The red ink exceeded the $22.4 million the company suffered in the second quarter of 2014.

Phoenix attributed its poor performance in 2015 to "unfavorable mortality" experience in the company's open block, primarily in its universal life product line, which contributed approximately $35 million to the loss. The company was also beset by financial reporting expenses of $13.4 million, including $4.1 million relating to remediation, $5.0 million in audit expenses, and $4.3 million in other external financial reporting support.