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Icahn to support AmTrust go-private deal after price increase

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Icahn to support AmTrust go-private deal after price increase

Activist investor Carl Icahn has agreed to support AmTrust Financial Services Inc.'s go-private transaction after the parties agreed to raise the deal price by $1.25 per share.

AmTrust announced that, under an amendment merger agreement, 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, will now acquire the company for $14.75 per share in cash. The transaction values the fully diluted equity of the company at approximately $2.95 billion, excluding outstanding preferred stock.

Icahn also agreed to waive appraisal rights and other claims with respect to the transaction. The activist investor had taken issue with the deal's price tag. Proxy advisory firms were split in their recommendations.

The special shareholder meeting to approve the deal, which had been adjourned amid the proxy battle with Icahn, will now reconvene June 21. The deal is expected to close in the second half of the year.

Soon after the amended merger agreement was disclosed, Czech investment company Arca Capital in a statement said it applauded fellow minority shareholders for rejecting the transaction's original terms, calling the prior $13.50 per-share price "absurdly low." Arca said the purchase price of more than $22 per share would be fair, but made no mention of Icahn, who it had backed in his fight against the deal's previous terms.

In an emailed statement to S&P Global Market Intelligence, Arca dismissed the $1.25 per-share increase as "cosmetic," and said it is"strongly against" the revised transaction.

"We still consider it as one of the biggest non-transparent cash-out mergers in history of Wall Street," it said. "We respect Mr. Icahn's opinion, but he is not eligible for the voting so other shareholders will decide."

Willkie Farr & Gallagher served as the independent legal adviser to AmTrust's special merger committee. Its team was led by Steven Seidman and included Laura Delanoy and Sean Ewen.