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Proxy advisory firms split over AmTrust go-private deal

Proxy advisory firm Institutional Shareholder Services Inc. is advising AmTrust Financial Services Inc. shareholders to reject the company's pending go-private merger transaction, The Insurance Insider reported.

ISS raised several concerns regarding the nature of the deal, which will see Evergreen Parent LP, an entity formed by private equity funds managed by Stone Point Capital LLC, together with CEO Barry Zyskind, George Karfunkel and Leah Karfunkel, acquire about 45% of AmTrust's common shares that the Karfunkel/Zyskind families and certain of its affiliates and related parties do not currently own or control.

The proxy advisory firm said that AmTrust would fare better in a "standalone scenario" and that shareholders should vote against the proposal.

A different proxy advisory firm, however, is recommending that AmTrust's shareholders vote in favor of the go-private deal. Glass Lewis & Co. LLC noted that there has not been any increased offer since activist investor Carl Icahn got involved in the deal, and said it is unlikely that the company could "extract a higher price" for the transaction.

Shareholders are set to vote on the deal June 4.