Equitable Holdings Launches Cash Tender Offer for 46M AllianceBernstein Units
Equitable Holdings, Inc. (NYSE: EQH), a premier financial services holding company overseeing Equitable, AllianceBernstein, and Equitable Advisors, has formally announced the launch of a significant cash tender offer. This offer aims to acquire up to 46,000,000 units (“Units”) representing assignments of beneficial ownership of limited partnership interests in AllianceBernstein Holding L.P. (NYSE: AB) (“AB Holding”). The tender offer is set at a price of $38.50 per Unit, net to the seller in cash, for a total purchase price reaching approximately $1.8 billion, subject to applicable tax withholding. This represents a 7.8% premium over AB Holding’s closing price per Unit on the New York Stock Exchange as of February 21, 2025.
The proposed purchase of these Units accounts for roughly 41.7% of AB Holding’s currently outstanding Units. The Offer is being executed based on the terms and conditions detailed in the Offer to Purchase and the accompanying Letter of Transmittal, both dated February 24, 2025. Equitable’s primary objective behind this initiative is to increase its stake in AllianceBernstein L.P. (“AB”), which serves as the operational entity of AB Holding. Through this tender offer, Equitable also provides AB Holding unitholders with an opportunity to liquidate some or all of their Units at a premium to prevailing market prices prior to the Offer’s announcement.
As of the Offer to Purchase’s release date, Equitable does not directly own any of AB Holding’s outstanding Units. However, through direct ownership and its subsidiaries, Equitable holds an approximate 61.9% interest in AB. This ownership is a combination of general partnership interests in both AB Holding and AB, along with limited partnership Units in AB. Should the full 46,000,000 Units be successfully purchased, Equitable’s economic interest in AB would increase to approximately 77.5%.
Tender Offer Mechanism and Conditions
If the total number of Units tendered exceeds 46,000,000 and these Units are not withdrawn appropriately, Equitable will acquire the Units on a pro rata basis. In this scenario, Units that are not purchased will be returned to the respective unitholders.
The Offer is currently scheduled to expire at 5:00 p.m. New York City time on March 24, 2025 (“Expiration Time”), unless extended. Any extension to the Offer will be publicly announced by 9:00 a.m. New York City time on the following business day after the initially scheduled Expiration Time.
It is essential to note that the Offer is not contingent upon obtaining financing or requiring a minimum number of Units to be tendered. However, the Offer remains subject to standard customary terms and conditions as outlined in the Offer to Purchase document.
Steps for Unitholders to Participate
Unitholders looking to tender their Units must follow the specified procedures detailed in the Offer to Purchase and the related Letter of Transmittal. All the relevant terms and conditions are provided in these documents, which Equitable has filed with the Securities and Exchange Commission (“SEC”).
For those seeking further information or assistance with the Offer, copies of the Offer to Purchase, the Letter of Transmittal, and other related materials can be obtained free of charge from D.F. King & Co., Inc. (“D.F. King”), the designated information agent (“Information Agent”) for the Offer. Unitholders with questions about the Offer or in need of assistance can reach D.F. King at (800) 848-3402 (toll-free). Additionally, banks and brokerage firms may contact D.F. King directly at (212) 269-5550 or communicate with Barclays Capital Inc., which is serving as the dealer manager for the Offer (“Dealer Manager”), at (800) 438-3242 (toll-free). Computershare Trust Company, N.A. has been appointed as the depositary and paying agent (“Depositary and Paying Agent”) for the Offer.
No Recommendations from Equitable and Affiliated Parties
It is crucial to acknowledge that neither Equitable, the Dealer Manager, the Information Agent, nor the Depositary and Paying Agent is making any recommendation regarding whether unitholders should tender their Units in response to the Offer. Furthermore, no authorized entity has provided any recommendation in this regard. Unitholders must independently evaluate and decide whether they wish to tender any or all of their Units and, if so, determine the number of Units they would like to tender.
Strategic Implications of the Offer
This tender offer marks a strategic move by Equitable to consolidate its control over AllianceBernstein, further reinforcing its position in the financial services industry. By increasing its economic interest to a potential 77.5%, Equitable stands to gain a stronger influence over AB’s operational and financial decisions. This move aligns with the company’s broader strategy of enhancing its portfolio of financial services and optimizing long-term value for its stakeholders.
For AB Holding unitholders, the Offer presents an opportunity to liquidate their holdings at a premium. Given market fluctuations and uncertainties, the 7.8% premium could be an attractive proposition for those seeking immediate liquidity or reallocation of their investment portfolios.
Market Reactions
The financial markets have closely monitored Equitable’s tender offer, particularly due to its potential impact on AB’s future operations and ownership structure. Analysts predict that a successful tender could lead to increased operational synergies within Equitable and AB, allowing for streamlined decision-making and potential cost optimizations. However, the Offer’s implications for minority unitholders post-transaction remain an area of interest and scrutiny.
Moreover, this move by Equitable reflects a broader trend in the financial services industry, where large firms are increasingly seeking to consolidate their holdings and optimize their capital structures. With shifting market dynamics and evolving regulatory landscapes, such strategic transactions are becoming a prevalent mechanism for companies looking to solidify their market positions and drive long-term growth.
Equitable Holdings, Inc.’s tender offer to acquire a substantial portion of AB Holding’s Units at a premium price is a noteworthy event in the financial services industry. With a potential economic interest increase to 77.5% in AllianceBernstein, Equitable is positioning itself for stronger influence and control over AB’s future operations.
For unitholders, the Offer provides an opportunity to sell their Units at a favorable price, offering liquidity at a time when market conditions remain uncertain. However, the decision to participate in the Offer should be carefully considered, and unitholders are encouraged to review all relevant documents and seek financial advice if necessary.
As the Offer progresses, market participants will closely observe its outcome and potential ripple effects within the financial services sector. Whether Equitable’s move leads to enhanced growth opportunities or raises concerns among minority unitholders, this transaction undeniably represents a significant strategic step for the company and its stakeholders.
