Maiden Holdings, Kestrel Group to combine
Maiden Holdings and Kestrel Group announced that they have entered into a combination agreement to combine and form a new, publicly listed specialty program group. Pursuant to the terms of the combination agreement, at the closing of the transaction, each issued and outstanding common share of Maiden will be converted into the right to receive one common share in a newly formed Bermuda company that will acquire both Maiden and Kestrel. The transaction values Kestrel at up to $167.5M, consisting of upfront cash of $40M, 55M common shares of the combined company valued at $82.5M and an earnout of up to $45M payable in common shares of the combined company. At the closing of the transaction, the combined company will be rebranded as Kestrel Group and expects that its common shares will be listed on the Nasdaq. The combined company will be led by Luke Ledbetter, Terry Ledbetter and Pat Haveron. Following closing of the transaction, Kestrel will continue to write business through its use of A.M. Best A- FSC XV insurance carriers Sierra Specialty Insurance Company, Rochdale Insurance Company, Park National Insurance Company, and Republic Fire and Casualty Insurance Company, all subsidiaries of AmTrust Financial Services. In connection with the transaction, the combined company will have the option to acquire the insurers from AmTrust. The transaction has been unanimously approved by all of the directors of Maiden that voted on the matter and unanimously approved by the board of managers of Kestrel. Following completion of the transaction, the board of directors of the combined company will consist of seven directors, made up of four directors selected by an affiliate of the Ledbetters, two of whom will be independent under applicable securities laws and stock exchange rules, and three directors selected by AmTrust, two of whom will be independent under applicable securities laws and stock exchange rules. In connection with the transaction, Maiden has suspended its share repurchase program. The transaction is subject to certain closing conditions, including the approval of Maiden's shareholders, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the approval of listing of the shares of the combined company on the Nasdaq and the receipt of certain other regulatory approvals. Closing is expected to occur in the first half of 2025. Assuming that certain proposed amendments to the bye-laws of Maiden that have the effect of eliminating voting "cutback" requirements applicable to certain holders of Maiden common shares are adopted and become effective with the approval of Maiden shareholders, Maiden shareholders holding issued and outstanding shares representing approximately 44.8% of the total issued and outstanding Maiden common shares have agreed to vote in favor of adopting the transactions contemplated by the combination agreement and against certain other transactions.
