Supporters and opponents of AmTrust Financial Services’ bid to go private are making their case before the proposal goes before stockholders for a vote in just a couple of days.
On May 29, AmTrust itself issued a statement urging stockholders at the June 4 special meeting to vote for the measure, noting that “it is important for all AmTrust stockholders to vote” and that “the support of a majority of unaffiliated stockholders is required” to approve the deal.
Stone Point Capital partners, CEO Barry Zyskind, Director George Karfunkel and his wife, Leah Karfunkel, want to acquire the 45 percent of AmTrust that they, and other entities, don’t already own or control. Their bid is under a corporate entity named Evergreen Parent L.P., and it calls for shareholders not affiliated with the Karfunkel-Zyskind family to get $13.50 in cash for each share of AmTrust common stock they own.
Similarly, independent proxy advisory firm Glass Lewis & Co. is also recommending that AmTrust stockholders vote for the carrier to go private.
AmTrust cited a Glass Lewis report issued May 24 that endorsed going private as the best option for AmTrust in terms of value, as the price per share is at a premium (33 percent over the company’s unaffected closing common stock price on Jan. 9, 2018).
Additionally, AmTrust pointed out that proxy advisory firm Egan-Jones supports the deal as one that is in “the best interests of the Company.”
AmTrust shareholder Arca Capital, meanwhile, released its own statement urging “fellow minority shareholders” to vote against the proposal to go private.
Arca, which owns 2.4 percent of the outstanding AmTrust shares, cited a report from Institutional Shareholder Services stating that the transaction is “against the interests of minority shareholders.” Arca also pointed out that ISS agrees that the timing of privatization is an issue, arguing that it “is coming at a turnaround time for the company, and thus, if approved, would allow the Zyskind/Karfunkel family to exclude minority shareholders from realizing future gains.”
As well, Arca cited its “substantial concerns” that Zyskind or the Karfunkels haven’t appeared publicly to defend the transaction.
Arca backs billionaire Carl Icahn who owns 9.4 percent of AmTrust’s shares and sued in late May to stop the company from going private, arguing that the transaction unfairly benefits the Karfunkels.
“AmTrust is a fundamentally strong company that we believe is on the cusp of a major rebound in share price. We agree with the conclusions of Carl Icahn, a major shareholder in AmTrust, who believes that AmTrust Financial has a long term price target significantly in excess of the clearly insufficient price the Zyskind/Karfunkel family is offering,” said Pavol Krúpa, Chairman of Arca Capital.
Sources: AmTrust Financial Servcies, Arca Capital