Icahn intervenes in AmTrust going-private plan

Billionaire investor Carl Icahn disclosed a 9.38 percent stake in insurer AmTrust Financial Services and said in a letter to the insurer’s board that he strongly opposed the going-private deal.

Icahn expressed his “strong opposition to and intention to vote against” the proposed merger by and among Evergreen Parent.

Stone Point Capital, the Karfunkel Family, and the CEO of AmTrust are in the process of acquiring AmTrust in a transaction valued at approximately $2.7 billion with a view of taking AmTrust private. Evergreen Parent, an entity formed by private equity funds managed by Stone Point Capital will acquire the approximately 45 percent of the company's issued and outstanding common shares that the Karfunkel-Zyskind family and certain of its affiliates and related parties do not presently own or control.

AmTrust CEO Barry Zyskind had argued that as a private enterprise AmTrust will be able to focus on long-term decisions, without the emphasis on short-term results.

AmTrust wants to address financial controls as well as pricing and reserve adequacy issues.

The specialty property/casualty insurer, which specializes in coverage for small businesses, reported a net loss of $348.9 million for 2017 after a net profit of $430.4 million in 2016.

The company’s shares jumped more than 10 percent in after-market trading after the Icahn stake was disclosed, according to a May 17 Reuters report. The investor said that he wants AmTrust to change the date for the special meeting, which was originally scheduled for June 4 “to avoid disadvantaging shareholders who acquired their shares after April 5, 2018”.

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