What happened

Genworth Financial (NYSE:GNW) reported its fourth-quarter earnings today, and investors seem to be happy with the results. As of 10:30am EST, the stock is up by more than 14%.

Just to run through a few of the highlights:

  • Genworth earned $0.70 per share in the fourth quarter, compared to a loss of $0.25 a year ago.
  • Genworth's U.S. full-year mortgage insurance operating income increased 24% over 2016.
  • Genworth got a $0.91 per share benefit from tax reform (Note: This is even more significant than it may seem considering Genworth's share price of just over $3.00.)
List of stock prices with green upward arrow superimposed over it.

Image source: Getty Images.

So what

Even more significant, and what's most likely moving the stock along with the strong earnings results, is the news that Genworth and China Oceanwide Holdings Group have refiled their joint voluntary notice with regulators, hoping for approval for the latter's acquisition of Genworth.

The acquisition has been delayed several times due to government scrutiny, and was first announced in October 2016. China Oceanwide has agreed to buy Genworth for $2.7 billion, which translates to a deal price of $5.43 per share. This would be a massive 73% premium over the current stock price.

Also because of the delay in the acquisition, Genworth said that it would try to use secured debt to address about $600 million of debt that is due in May 2018.

Now what

Keep in mind that even after today's jump, Genworth shares are a long way off from its proposed acquisition price, which means that the market is still not too confident that the deal will get done. However, the news today means that a 75-day review period will effectively start over, buying more time for the deal to be approved instead of it falling apart altogether. The new deadline is April 1, 2018, however the companies can choose to withdraw and refile their application again if that date approaches with no approval.

Matthew Frankel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.