Shares of Genworth Financial (GNW -0.33%) jumped 14% on Tuesday morning after the insurance company said it remains committed to a deal to be acquired by China Oceanwide Holdings Group, ensuring one of the longest-running Wall Street soap operas will continue for at least another month.
China Oceanwide first announced plans to acquire Genworth in October 2016, but the deal has been stalled by regulatory issues and other hurdles. In June Genworth granted Oceanwide a 15th deadline extension to get the deal done, but said it wanted to see concrete proof Oceanwide can come up with the needed financing for the transaction by Aug. 31.
On Monday after markets closed, Genworth said Oceanwide had come through. In a statement, Genworth said its board and management team determined that Oceanwide "has provided satisfactory information" regarding its funding plan, and said Genworth will not exercise its right to terminate.
"We believe the funding is progressing well and that Oceanwide is working to close the transaction by September 30, 2020," non-executive chairman James Riepe and CEO Tom McInerney said.
The news is good, but given the history investors are wise to not assume the deal is finally nearing conclusion. Shares of Genworth gave back some of their initial gains on Tuesday. Trading at $3.26 apiece as of this writing, there is still a significant spread between the current price and the $5.43-per-share offer price.
In theory, Oceanwide now has 30 days to finalize its funding and finally bring the transaction to a close. But from what we have seen over the last four years, deadlines mean little in this saga. Stay tuned.