AmTrust CEO defies Icahn in go-private deal

AmTrust Financial Services CEO Barry Zyskind continues to expect the  transaction to turn the specialty property/casualty insurer into a privately held company to occur in the second half of 2018 despite the recent intervention by billionaire investor Carl Icahn.

Stone Point Capital, the Karfunkel Family, and Zyskind 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.

However, 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.

In response to the Icahn move, Zyskind said in a letter distributed to employees of AmTrust that “we are making great progress towards completing the transaction, which we continue to expect to occur in the second half of 2018.

“As we outlined in March, we believe the proposed transaction delivers immediate and certain value for public shareholders at a significant premium and is in their best interest. We have heard positive feedback from shareholders who agree, and over the coming weeks, we will continue to communicate with all shareholders about the substantial value that this transaction will deliver.

"As we continue to work toward completing the transaction, it remains business as usual for all of us at AmTrust. We are committed to keeping you updated on important developments as we move toward the closing. We ask that you continue to do what you do best and provide the exceptional service and support that our policyholders, brokers, agents and partners have come to expect,” Zyskind said.

Zyskind had previously 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 firm, 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.

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