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Maiden Holdings , Ltd. (NASDAQ:MHLD), a Bermuda-based insurance firm currently trading at $0.72 per share, has amended the terms of its agreement to merge with Kestrel Group, LLC, as disclosed in a Form 8-K filing with the Securities and Exchange Commission today. The company’s stock has declined over 60% in the past six months, according to InvestingPro data, which also reveals 12 additional key insights about the company’s performance.
The amendment, dated today, adjusts the exchange ratio for Maiden Holdings’ shareholders and Kestrel Group’s equityholders. Under the new terms, each outstanding common share of Maiden Holdings will be converted into the right to receive one-twentieth (0.05) of a common share in the new combined entity, which will be rebranded as Kestrel Group following the closing of the transactions. Additionally, Kestrel Equityholders will receive an aggregate of $40 million in cash and 2,750,000 common shares of the new company. The deal comes at a crucial time for Maiden Holdings, which InvestingPro analysis shows has been struggling with profitability, reporting negative EBITDA of -$189.12 million in the last twelve months.
The amendment also provides for contingent consideration. Depending on the achievement of certain EBITDA milestones related to Kestrel’s pre-merger business, Kestrel Equityholders may receive up to the lesser of $45 million divided by specific share price averages or an additional 2,750,000 shares in the new company.
To address fractional shares that would result from the merger, the agreement states that Bermuda NewCo will pay cash in lieu of issuing fractional shares to any holder entitled to such shares, based on a specified formula related to Maiden Holdings’ share prices.
The filing also outlines the conversion of options and restricted shares. Options to purchase Maiden Holdings’ shares will be turned into options for the new company’s shares, with a recalculated exercise price. Restricted shares will undergo a similar conversion process.
This latest amendment follows the original Combination Agreement announced on December 29, 2024, and a subsequent amendment on February 17, 2025. The deal is set to combine Maiden Holdings and Kestrel Group under a new holding company structure, with both entities becoming wholly owned subsidiaries of the newly formed Bermuda NewCo after the completion of the merger.
Investors and stakeholders are directed to review the full amendment filed with the SEC for complete details of the transaction. Maiden Holdings has urged its shareholders to read the proxy statement/prospectus and other relevant documents filed with the SEC, as they contain important information about the merger and related matters. For deeper insights into Maiden Holdings’ financial health, which currently shows a weak overall score according to InvestingPro, subscribers can access comprehensive analysis including Fair Value estimates and detailed financial metrics.
The information in this article is based on a press release statement.
In other recent news, Maiden Holdings, Ltd. has announced a merger with Kestrel Group LLC to form a new specialty insurance entity. The transaction, expected to close in the first half of 2025, is subject to shareholder approval and regulatory conditions. Maiden shareholders will receive shares in a new Bermuda-based company that will acquire both Maiden and Kestrel, with the combined entity rebranded as Kestrel Group. This strategic move aims to optimize returns for shareholders by focusing on specialty program and reinsurance underwriting. Additionally, Maiden Holdings has been named in a lawsuit filed by WUSO Holding Corporation and 683 Capital Partners (WA:CPAP) regarding the past sale of Maiden Reinsurance North America, Inc. The plaintiffs allege a breach of Maiden’s indenture related to its Senior Unsecured 7.75% Notes. Maiden Holdings has expressed confidence in its legal position and plans to defend against these claims. The financial implications of the lawsuit remain uncertain, and investors are advised to monitor the situation closely.
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