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With a yearslong planned deal looking increasingly unlikely to go through, Genworth Financial Inc. has been left with limited options as it hopes to meet sizeable near-term debt obligations.
Genworth's planned merger with China Oceanwide Holdings Ltd. was first announced more than four years ago. But following regulatory and financing issues that spurred multiple extension deadlines, the company said Jan. 4 that it would not extend the deal agreement beyond the most recent year-end 2020 deadline and would instead focus on a contingency plan to meet its upcoming debt obligations.
"The situation right now is fluid and troubling," CFRA analyst Cathy Seifert told S&P Global Market Intelligence. "They did lose a lot of credibility in the marketplace as a result of this debacle."
To be sure, investors never seemed to have full confidence that the transaction would come to fruition, Seifert noted. Since the deal's October 2016 announcement, Genworth's closing share price never met the value of China Oceanwide's offer.
A financial predicament
The deal is not yet dead — either party can now terminate it at any time, but China Oceanwide is still working toward a completion — and Seifert said she would...