Company: KG
Filing Date: 2025-03-26
Form Type: 424B3
Source: 0001104659-25-028251
Chunk: 112

Company: Kestrel Group Ltd
Filing Date: 2025-03-26
Form: 424B3
Chunk 112
---
 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 be necessary to obtain such a favorable rating. Mr. Haveron also expressed his view that transferring the AmTrust reinsurance liabilities off Maiden’s balance sheet would significantly reduce the substantial market uncertainty associated with the AmTrust reserves and de-risk Maiden’s balance sheet, thereby increasing the prospects of a favorable investor reaction to the transaction. Following deliberation among members of the Maiden board, the Maiden board authorized Maiden management to continue exploring a potential business combination transaction with Kestrel and AmTrust.

On March 18, 2024, Maiden and a subsidiary of Kestrel executed a mutual non-disclosure agreement.

Following execution of the mutual non-disclosure agreement, Maiden management and representatives of IAP, Maiden’s financial advisor, engaged in discussions with representatives of Kestrel, AmTrust and Evercore Group L.L.C., Kestrel’s financial advisor (“Evercore”), regarding a potential business combination transaction. Maiden selected IAP as its financial advisor because it is a recognized financial advisory firm that has substantial experience in transactions similar to the combination. Pursuant to an engagement letter, dated March 25, 2024, Maiden engaged IAP to act as its financial advisor in connection with the combination.