Company: MHLA
Filing Date: 2025-03-26
Form Type: DEFM14A
Source: 0001104659-25-028254
Chunk: 113

Company: Maiden Holdings, Ltd.
Filing Date: 2025-03-26
Form: DEFM14A
Chunk 113
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 and the commutation of certain AmTrust reinsurance liabilities. Members of the Maiden board and Maiden management discussed that a combination with Kestrel would be a significant step in transitioning Maiden’s operations toward a fee-based business and that Maiden was well-positioned to expand Kestrel’s current fronting business. Mr. Haveron noted that he believed the Ledbetters’ prior success at State National would cause a combination with Maiden to be viewed positively by investors.

The Maiden board asked Maiden management a number of questions, including initial views on valuation and whether any members of the Ledbetter family would be involved in the management of the combined company. Mr. Haveron advised the Maiden board that valuation discussions had not yet occurred

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and that one or more members of the Ledbetter family were expected to be involved in the management of the combined company. Members of the Maiden board observed that Maiden needed to pursue strategic alternatives to diversify its operations given that Maiden did not presently have a true operating business, and that combining Kestrel’s growing fronting business with Maiden’s access to public equity markets and long-term debt as sources of capital and a reinsurance balance sheet made a potential combination of Maiden and Kestrel attractive.

The Maiden board asked additional questions about the rationale for the acquisition of the AmTrust Insurance Companies. Mr. Haveron explained that the four AmTrust Insurance Companies were collectively licensed to write admitted and non-admitted specialty business in all 50 states, were the dedicated insurance carriers through which Kestrel was currently writing its business and would provide the underwriting capacity necessary to grow the Kestrel business. Mr. Haveron further explained that Kestrel had a very favorable option to buy the AmTrust Insurance Companies as “clean shells” (i.e., without any historic, pre-Kestrel liabilities) for an amount equal to the GAAP book value of the four companies and that, in substance, the combined company would be utilizing Maiden’s balance sheet to exercise Kestrel’s option. The Maiden board also asked questions about the proposed commutation of the AmTrust reinsurance liabilities. Mr. Haveron explained that if Maiden acquired the AmTrust Insurance Companies, it would be critical to the future success of the combined company to obtain a favorable rating from A.M. Best and that, based on preliminary analysis, transferring the AmTrust reinsurance liabilities by way of commutation to AmTrust or retrocession to a third-party reinsurance company would likely