Stone Point Capital, the Karfunkel Family, and Barry Zyskind, Chief Executive Officer (CEO) of AmTrust Financial Services, have increased their bid for the acquisition of AmTrust Financial Services for a second time, now offering $14.75 per share in cash for all outstanding shares.
This offer represents an increase of $1.25 per share, or 9.3%, in cash consideration to AmTrust public stockholders, over the previously agreed $13.50 per share, and a 45% premium to the company’s unaffected closing stock price on January 9, 2018.
The original offer, made in January 2018, was for $12.25 per share in cash, which represented a 20.8% premium over AmTrust’s closing stock price.
Don DeCarlo, Chairman of AmTrust’s Special Committee, said: “The amended agreement follows significant engagement with our public stockholders, and is consistent with our commitment to maximize value for public stockholders. We continue to believe that the immediate, certain, premium value provided in this agreement is in the best interest of AmTrust’s public stockholders and look forward to the completion of the transaction.”
AmTrust’s Special Committee has unanimously approved the revised merger and recommends that public stockholders vote ‘FOR’ the amended proposal.
The amendment applies to the merger agreement between AmTrust and Evergreen Parent, an entity formed by the Karfunkel-Zyskind Family and private equity funds managed by Stone Point.
Under the terms of the amended agreement, Evergreen will acquire the 45% of AmTrust’s shares of common stock not already owned by the Karfunkel-Zyskind Family and certain of its affiliates and related parties.
The transaction values the fully diluted equity of AmTrust at approximately $2.95 billion, excluding the company’s outstanding preferred stock.
Additionally, AmTrust and Evergreen have entered into a settlement and support agreement with affiliates of Carl C. Icahn (the ‘Icahn Group’), who have agreed to support the transaction and waive appraisal rights and other claims related to the deal.
Icahn commented: “We are pleased that we were able to work with George Karfunkel and Barry Zyskind to reach a settlement that is in the best interest of all stockholders. By raising the merger price to $14.75, over $100 million of incremental value has been created for public stockholders. Most importantly, we want to thank all the stockholders whose vital support was so critical to achieving this outcome.”
An analyst at KBW added: “The record date (April 5, 2018) and voting date (June 21, 2018) are unchanged, so Mr. Icahn and his affiliates still cannot vote, but we believe that he has enough influence among voting shareholders to make approval much more likely.”
The proposed merger is expected to close in the second half of 2018, subject to approval by a majority of the shares of AmTrust not owned or controlled by the Karfunkel-Zyskind Family and certain related parties.
