Arca Capital Urges NO Vote on AmTrust Privatization Plan; Demands Zyskind/Karfunkel Family Publicly Defend Proposed Transaction

PRAGUE, May 30, 2018 /PRNewswire/ -- Arca Capital, one of the largest shareholders of AmTrust Financial Services, Inc., is urging fellow minority shareholders to vote against the proposed "going private" transaction of AmTrust Financial Services, Inc. at what it believes to be the absurdly low valuation of $13.50 per share. Among the numerous reasons cited by Arca Capital for opposing the transaction was the recent report from the highly respected firm, Institutional Shareholder Services (ISS), which stated that the transaction is against the interests of minority shareholders.

"Given that the valuations implied by the merger are below where peers currently trade and below where AmTrust could reasonably trade as a standalone company in the long-term…a standalone scenario seems to be a preferable alternative to the currently proposed transaction. Given these factors, a vote AGAINST the merger is warranted," states the report released on May 25th.

Moreover, the report mirrored Arca Capital's concerns that the privatization is coming at a turnaround time for the company and thus, if approved, would allow the Zyskind/Karfunkel family to exclude minority shareholders from realizing future gains.

"The buyer group eventually included the company's CEO, who would appear to know the company as well as anyone; if he is willing to buy at this price, does that not imply that the company's challenges are not so severe?" the report continues.

Arca Capital, which owns approximately 2.4 percent of the outstanding shares, has been an outspoken advocate for fellow minority shareholders in the lead up to the June 4th vote. This advocacy has involved creating an organization, www.ProtectAmTrustInvestors.org, reaching out to relevant influencers, and even organizing demonstrations at AmTrust headquarters involving angry shareholders.

"AmTrust is a fundamentally strong company that we believe is on the cusp of a major rebound in share price. We agree with the conclusions of Carl Icahn, a major shareholder in AmTrust, who believes that AmTrust Financial has a long term price target significantly in excess of the clearly insufficient price the Zyskind/Karfunkel family is offering," said Pavol Krúpa, Chairman of Arca Capital.

Arca Capital has also expressed substantial concerns that neither AmTrust CEO Barry Zyskind nor controlling board members George and Leah Karfunkel have appeared publicly to defend the transaction.

"A basic internet search will reveal that the Zyskind/Karfunkel family prefers to operate clandestinely to avoid drawing attention to their dubious activities. If Barry Zyskind, George Karfunkel and Leah Karfunkel are so confident in the merits of their arguments for this transaction, they should make these arguments in public instead of in smoke-filled rooms filled with their crony supposedly 'independent' board members. We challenge them to appear on CNBC and answer questions from their shareholders," added Mr. Krúpa.

The Zyskind/Karfunkel family are currently defendants in a lawsuit filed by Carl Icahn, which accuses them of undervaluing AmTrust, attempting to manipulate the privatization vote by clandestinely setting the record date for April 5, 2018, and using the company's assets, including private jets, for personal purposes.  Icahn, who currently owns approximately 9.4% of AmTrust's shares, filed the lawsuit on Monday May 21st in Delaware Chancery Court.  Arca Capital previously issued a statement supporting the lawsuit and continues to demand greater transparency regarding potential share price manipulations and related-party transactions by AmTrust's management.

Arca is advising fellow minority shareholders to adhere to the famous words of Carl Icahn, "A lot of people died fighting against tyranny. The least I can do is vote against it."

About Arca Capital

Arca Capital is a private investment group with a strong Central European exposure. It focuses on the development of its private equity activities oriented on energy, real estate, retail and service activities, as well as regulated activities focused on building and managing fund structures focusing on energy, real estate and financial services. Arca Capital also carries out projects with a so-called activist approach, with the goal of remedying and eliminating management actions that have a negative impact on companies, and with the goal of achieving significant positive change in strategy, financial structure or management. 

Assets under management over $1.7 billion USD.

Contact

Barbora Hanakova
[email protected] 
Mob: +420 776 575 096
Tel: +420 224 231 813

SOURCE Arca Capital