After weeks of wrangling and looming uncertainty about whether or not it would get over the line, AmTrust’s CEO and his wife’s family have finally won out in their bid to take the firm private in a $2.95bn deal with Stone Point which has faced substantial opposition from activist and minority investors.

The process hasn’t been straightforward, but Barry Zyskind and his in-laws the Karfunkel family who own the majority of the firm have gotten their way with a $14.75 per share offer that was 9.3 percent than an earlier “final” bid after activist investor Carl Icahn got involved sniffing a ripe M&A arb opportunity.

So with the dust finally beginning to settle and AmTrust set to take its bow and delist from Nasdaq after over a decade as a public company, who are the big winners and losers from the saga?

re-Insurance.com breaks it down…

The winners

AmTrust management

Yes, they have taken a few bloody noses on the way, but Zyskind and co are indisputably the victors after they got the necessary support for a deal, which allows them the space and time to deal with the company’s well-documented issues.

And crucially, they can do this outside of the glare of the public markets, where they have been pounced on by short-sellers and activists which have lobbed criticism at the family over their management style and tight hold over the firm.

Zyskind and his lieutenants had serious cause for concern when Icahn came out strongly against the deal and revealed a substantial shareholding in the company. But management negotiated the issue tactfully - delaying an initial vote instead of risking what could have been an embarrassing defeat - to buy out the opposition with a relatively-cheap 9.3 percent uptick on their earlier bid. 

There were a lot of darts thrown in the battle by both sides, but despite the raft of allegations, management appear to have weathered the onslaught without losing any limbs and now can focus on the job of righting the ship.

Activist investors

Carl Icahn seems to have a fondness for the P&C (re)insurance space.

Maybe it was the storied activist’s recent failure to force AIG’s board to break up the insurance giant that pushed him to take on this controversial deal, which has bolstered the value of his holding in AmTrust by over $20mn after just over a month of haranguing the firm and its shareholders.

His intervention helped bolster the resolve of AmTrust investors who fended off an initial $12.25 tabled by Zyskind,his in-laws and their backers in January. 

After traders pushed the firm’s share price above that level, the bidders then revised up their offer to $13.50.

But even with that 10.2 percent boost, minority investors howled at the rank injustice being served to them by the offer price, which was just over a third of the $35.54 high the stock hit in the summer of 2015

For Icahn, that represented a tantalising opportunity, and the investor threw himself into the fray unreservedly, attacking management for their performance over the last year and railing against the “opportunistic ploy” to take the firm private.

And what a success he has been. After securing the increased offer, Icahn cooed about the $100mn of incremental value that he had bagged for public stockholders and his staunch opposition swiftly dissipated.

The losers

Long term investors

While AmTrust and Icahn have lauded the deal as a victory for all sides, there will be one interested group that will remain unimpressed by the conclusion of the saga: the company’s long term investor base.

Sure, the Icahn-negotiated $14.75 will yield a healthy payday for recent purchasers of AmTrust stock which was languishing at around the $10 mark at the end of last year.

But it will provide little comfort to those who have had their stakes’ value more than halved over a two year period after a litany regulatory scandals and accounting missteps that occurred on Zyskind’s watch.

Opposition to the deal from minority shareholders has been fierce, and has centred not just around the deal price, but on the governance of the company and in particular the actions and the timing of the deal from CEO Zyskind, his wife Leah Karfunkel and the extended family.

So while others (not least management) are likely to be popping the champagne, spare a thought for those who have stuck with AmTrust and may feel jilted by this deal.

Maiden?

While all the focus during this deal process has been centred on the future of AmTrust and what that holds, relatively little attention has been paid to how the transaction will impact its Bermudian sister company Maiden.

The firm’s share price jumped 16.9 percent to $7.60 when Zyskind, his family and their backers first bid to take AmTrust private in early January. 

But Maiden’s shares sold off sharply just two months later - on the back of a poor 2017 - sending the stock price below $6.00.

Since then the stock has posted a fairly impressive rally, jumping over 45 percent with heavy trading as markets weigh the impact on Maiden of AmTrust delisting.

Maiden relies heavily on AmTrust, with around three quarters of the Bermudian reinsurer’s premiums stemming from a long-standing quota-share it has with the US insurer.

However, that business has repeatedly and significantly dented Maiden’s profitability, and investors may be hoping that away from the glare of the public markets, AmTrust will be able to improve its own performance and limit the losses it often passes to its sister company and reinsurer.

They may also be speculating that Zyskind and the Karfunkels - who jointly own more than 15 percent of Maiden - may have the reinsurer in their sights to continue their shopping spree. 

On the other hand many may see a potential downside for Maiden. Once in private ownership, Stone Point may encourage management to undertake a strategic review of AmTrust.

That will likely include the group’s reinsurance relationships and given Maiden’s recent troubles, its quota-share with AmTrust would seem a likely place to start.

Time will tell - but until then investors are likely to have a lot more questions over where Maiden will land now that the AmTrust sale saga appears to have reached a conclusion.