Company: KG
Filing Date: 2025-03-24
Form Type: S-4/A
Source: 0001104659-25-027242
Chunk: 116

Company: Kestrel Group Ltd
Filing Date: 2025-03-24
Form: S-4/A
Chunk 116
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closing consideration of $78 million payable at closing of a transaction in Maiden shares;

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earnout consideration of up to $52 million payable, at the option of Maiden, in either cash, Maiden shares or a combination of cash and Maiden shares, if Kestrel’s 2026 EBITDA was between $28.6 million and $57.2 million; and

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additional earnout consideration of between $26.3 million to $27.5 million payable, at the option of Maiden, in either cash, Maiden shares or a combination of cash and Maiden shares, if Kestrel’s 2026 EBITDA exceeded $57.2 million.

The April 24 Proposal also assumed (among other items) that, contemporaneous with the acquisition of Kestrel, Maiden would acquire the AmTrust Insurance Companies and commute certain reinsurance liabilities ceded by AmTrust to Maiden not covered by the Loss Portfolio Transfer and Adverse Development Cover Agreement, dated July 31, 2019, between Cavello Bay Reinsurance Limited, a subsidiary of Enstar Group Limited, and Maiden Reinsurance Ltd., a subsidiary of Maiden (the “Commutation”) and that Kestrel would appoint at least two representatives to the Maiden board.

Over the course of the next several weeks, Mr. Haveron and representatives of IAP engaged in various discussions with representatives of Kestrel and Evercore. At the same time, Maiden engaged in initial discussions with independent third-party actuaries and independent reinsurance brokers regarding their potential engagement in connection with a Commutation or retrocession of the AmTrust reinsurance liabilities.

On May 24, 2024, Kestrel delivered a counterproposal indicating that, in Kestrel’s view, Maiden’s proposal undervalued Kestrel’s business (the “May 24 Counterproposal”). The May 24 Counterproposal proposed a total value of $280 million for 100% of the equity of Kestrel consisting of:

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closing consideration of 70 million Maiden shares at a share price based on the 90-day volume-weighted average price of Maiden shares, which at the time of the May 24 Counterproposal had a value of approximately $123.2 million;

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earnout consideration of up to $156.8 million payable no earlier than three years following the date on which the potential transaction closes, at the option of Kestrel, in either cash, Maiden shares or a combination of cash and Maiden shares if Kestrel’s 2027 EBIT