In an announcement Tuesday, Stone Point, AmTrust Chairman and CEO Barry D. Zyskind, George Karfunkel and Leah Karfunkel proposed paying $12.25 per share in cash, which represents a 20.8% premium over AmTrust’s closing price on Jan. 8 and values the insurer at about $2.4 billion.
Stone Point and the Karfunkel-Zyskind family will not proceed with the deal unless it is approved by a special committee of independent directors of AmTrust, the statement said.
“Stone Point and the Karfunkel-Zyskind Family believe the proposed transaction will provide AmTrust’s common stockholders with immediate liquidity and certainty of value at a significant premium to the current share price while allowing AmTrust to focus on the long term without the emphasis on short-term results,” the statement said.
New York-based AmTrust, which is the third-largest workers compensation insurer in the United States based on 2016 figures, weathered a tough year in 2017. It delayed the filing of its 10-K with the U.S. Securities and Exchange Commission early in the year, and in April reports surfaced that it was the subject of a federal investigation into its accounting practices.
The insurer said it was unaware of any investigation, and family members of its founders injected $300 million into the company in May.
In July, it bought $400 million in adverse development coverage, and the coverage was exhausted by November. A.M. Best Co. Inc. put AmTrust’s A financial strength rating under review with negative implications.
It also sold a majority stake in another of its businesses, which raised $950 million.