Carl Icahn, Arca Capital throw combined weight against AmTrust’s go-private plan

The activist investor claims AmTrust isn't using an independent inspector but the company is pushing back
Billionaire activist investor Carl Icahn
Other minority shareholders applauded Icahn's efforts to overturn the bid to take AmTrust private

Activist investor Carl Icahn came out guns blazing Thursday against an attempt by the primary owners of AmTrust Financial Services Inc. (NASDAQ:AFSI) to take the New York company private.

Icahn, who owns a 9.4% stake in AmTrust, issued a statement on Thursday saying shareholders should demand an independent inspector of elections.

A key shareholder vote on AmTrust’s US$2.7bn going-private deal is currently scheduled for June 4.

“Unbelievably, AmTrust is planning to act as judge and jury of the shareholder vote on Monday,” Icahn wrote in a lengthy statement on his website, carlicahn.com.

“Generally, especially in contested elections, and because we believe most Boards are interested in holding a fair vote, an independent inspector of elections is engaged to tabulate the vote,” he added. “But, not at AmTrust.”

According to Icahn's statement, AmTrust has informed shareholders that “a representative of the company will count the votes and act as an inspector of election” at the company’s special meeting next week.

But an AmTrust spokesperson disputed that claim in an email to Proactive Investors, saying that AmTrust "is using an independent inspector of elections as is standard in contested matters.”

Meanwhile, Arca Capital, a top shareholder in AmTrust, joined Icahn earlier this week in opposing the US insurer's deal to be taken private.

READ: Carl Icahn fights attempt to take AmTrust Financial Services private sending shares surging

Ichan and the Czech-based investment company, which holds a 2.4% stake in AmTrust, urged shareholders to vote against the deal, citing "absurdly low valuation" of $13.50 per share.

Arca Capital said the privatization is coming at a "turnaround" time for the company, and if approved, "would allow the (founding) Zyskind/Karfunkel family to exclude minority shareholders from realizing future gains.”

On March 1, AmTrust said it would be acquired in a US$2.7bn deal by a group of shareholders including its founding family, chief executive officer and private equity funds.

Ichan has flayed the board of AmTrust for pursuing an “opportunistic going-private” deal.

AmTrust shares were up 1.2% to US$13.43 in afternoon trading.

-- This article has been updated to clarify the origin of Icahn's comment that AmTrust will count shareholder votes, and adds comment from the company disputing Icahn's claim --

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