Arca Capital is not backing down on its opposition of the privatization of AmTrust Financial Services, Inc., the investment firm said yesterday, announcing that court action is likely if shareholders approve what the firm views as an absurdly low-priced buyout of minority shareholders by members of the Zyskind and Karfunkel families.

The Prague-based investment firm, which owns approximately 2.4 percent of outstanding shares of AmTrust Financial, contends the fair value of AmTrust is approximately double the current $14.75 per share amended offer price.

Yesterday’s statement disclosed that Arca has retained counsel in its continuing campaign to prevent the buyout—Carl Stine of Wolf Popper LLP, who specializes in challenging merger and acquisition transactions.

The statement also noted that in accordance with Delaware law, Arca Capital has already sent a written demand for appraisal to AmTrust’s management. Should shareholders vote to approve the buyout at the June 21st Special Meeting, Arca Capital intends to proceed with exercising its appraisal rights through the Delaware Court of Chancery, the statement said.

“Neither the [original] $13.50 per share offer nor the amended $14.75 per share offer represent anywhere near fair value for the firm,” Arca said, urging a “No” vote to the privatization transaction in advance of the June 21 Special Meeting.

“The Zyskind/Karfunkel family knows well that the long-term price target of AmTrust is between $25 and $31 per share thus they will continue to increase their offers, as they have done twice before, IF shareholders reject this lowball offer,” said Pavol Krúpa, Chair of Arca Capital.

Source: Arca Capital