SCHEDULE: Fairfax, McMorrow Bid to Acquire Kennedy-Wilson Shares

A consortium led by Fairfax Financial Holdings and William J. McMorrow proposes to acquire all outstanding shares of Kennedy-Wilson Holdings not already owned for $10.25 per share in cash.

Summary

• Fairfax Financial Holdings Limited and its affiliates, along with V. Prem Watsa, and Kona Management Holdco, LLC (controlled by William J. McMorrow), have formed a consortium.
• The consortium proposes to acquire all outstanding shares of Kennedy-Wilson Holdings, Inc. not currently owned by its members or their affiliates for $10.25 per share in cash.
• The consortium collectively owns approximately 31% of Kennedy-Wilson's shares on an as-converted basis (including shares underlying warrants).
• V. Prem Watsa and related entities beneficially own 30,950,036 shares, representing 19.9% of the class, due to warrant exercise limitations. Without this restriction, they would beneficially own 38,703,549 shares, representing approximately 23.7%.
• FFHL Group Ltd. beneficially owns 26,296,303 shares (16.9%).
• Fairfax (US) Inc. beneficially owns 18,648,953 shares (12.0%).
• Odyssey Group Holdings, Inc. beneficially owns 12,156,496 shares (7.8%).
• Odyssey Reinsurance Company beneficially owns 12,028,530 shares (7.7%).
• Crum & Forster Holdings Corp. beneficially owns 4,641,526 shares (3.0%).
• Northbridge Financial Corporation beneficially owns 3,877,772 shares (2.5%).
• Allied World Assurance Company Holdings, Ltd and its subsidiaries collectively beneficially own 8,838,257 shares (5.7%).
• The proposal was delivered to Kennedy-Wilson's Board of Directors on November 4, 2025.
• The consortium is only interested in acquiring shares they do not already own and are not interested in selling their existing shares.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to a concrete acquisition proposal with a specified cash price, indicating a potential liquidity event for shareholders. However, the 'no assurances' clause and the right to withdraw introduce uncertainty, preventing a higher score.

Positives

• A clear cash offer of $10.25 per share for outstanding shares not owned by the consortium.
• The consortium, including key management (William J. McMorrow), demonstrates strong commitment by forming a joint bidding agreement.
• The consortium collectively holds a significant stake (approximately 31% on an as-converted basis), indicating alignment of interests.

Negatives

• Certain warrants held by reporting persons are subject to a limitation, restricting beneficial ownership to 19.9% unless shareholder approval is obtained.
• No assurances are given that a definitive agreement will be reached or that the proposed transaction will be consummated.
• The consortium reserves the right to modify or withdraw the proposal at any time.

Risks

• The proposed transaction is subject to the Board establishing a special committee of independent directors and subsequent negotiations.
• There is no guarantee that a definitive agreement will be reached or that the proposed transaction will be consummated.
• The consortium may modify or withdraw the proposal at any time, with or without prior notice.
• The transaction could lead to an acquisition of additional securities, an extraordinary corporate transaction (e.g., merger), delisting of shares, and other material changes to Kennedy-Wilson's business or corporate structure.
• Regulatory approvals (antitrust, competition, foreign investment, etc.) are required, and there's no obligation for any investor to divest material assets or accept significant restrictions to obtain such approvals.
• The proposed transaction structure aims for tax-free, tax-deferred, or non-recognition treatment for Rollover Equity, but there's a risk it might not be feasible or could have adverse tax consequences for some investors.

Future Outlook

The consortium intends to engage in discussions and negotiations with Kennedy-Wilson's Board and a Special Committee to finalize the proposed acquisition. They expect to respond to inquiries and negotiate terms, with the goal of reaching a definitive agreement for the Proposed Transaction. No further updates are planned until a definitive agreement is reached or legally required.

Management Comments

• The members of the Consortium are only interested in acquiring the outstanding Shares of Kennedy-Wilson that they do not already own, and are not interested in selling their Shares to another party.
• The Consortium expects the Board will establish a special committee of independent directors fully empowered to select and retain its own independent legal and financial advisors.
• No assurances can be given that a definitive agreement will be reached or that the Proposed Transaction will be consummated.
• The Consortium reserves the right to modify or withdraw the Proposal at any time, with or without prior notice.

Industry Context

This proposal represents a potential take-private transaction for Kennedy-Wilson Holdings, a real estate investment company. The involvement of Fairfax Financial Holdings, a diversified insurance and investment holding company, and its subsidiaries, highlights a strategic move to consolidate control over a significant investment. The proposed cash acquisition price will be evaluated against current market valuations and industry trends in real estate investment.

Management Changes

Corporate Governance

Related Party Transactions

• The Joint Bidding Agreement is between Kona Management Holdco, LLC (controlled by William J. McMorrow, who is the Chairman and CEO of Kennedy-Wilson Holdings, Inc.) and the Fairfax Bidders (Fairfax Financial Holdings Limited and its affiliates).
• McMorrow and the Fairfax Bidders collectively owned approximately 31% of Kennedy-Wilson shares on an as-converted basis prior to the proposal, indicating a significant pre-existing relationship and shared interest.
• The consortium members explicitly state they are only interested in acquiring shares they do not already own and are not interested in selling their existing shares, which is a key condition of their proposal.

Stakeholder Impact

• Shareholders: Potential for a cash payout of $10.25 per share for those not part of the consortium, offering liquidity at a fixed price. Uncertainty remains until a definitive agreement is reached.
• Management/Employees: William J. McMorrow, CEO of Kennedy-Wilson, is a key part of the bidding consortium, suggesting continuity or a structured transition for management. Other senior executive officers are also expected to roll over their equity.
• Company (Kennedy-Wilson): Potential for a significant corporate restructuring, including delisting from the NYSE, and changes to its business or corporate structure if the transaction proceeds.
• Fairfax Financial Holdings: Potential to consolidate control over a significant investment, aligning with its investment strategy.

Next Steps

• Kennedy-Wilson's Board is expected to establish a special committee of independent directors.
• The Special Committee will select and retain its own independent legal and financial advisors.
• The consortium will engage in discussions and negotiations with the Board and Special Committee regarding the Proposed Transaction.
• The consortium may modify or withdraw the proposal at any time.
• Negotiation and execution of Definitive Transaction Documents, including a Merger Agreement and Rollover Agreements.
• Agreement on Governance Documents for Bidco.
• Obtaining requisite shareholder approval for warrant exercise if beneficial ownership exceeds 19.9%.
• Obtaining necessary regulatory approvals (antitrust, competition, foreign investment, etc.).

Key Dates

Recommendation

The filing details a non-binding proposal to acquire shares at a specific cash price. While this offers a potential exit for shareholders, the transaction is not guaranteed, and the consortium reserves the right to modify or withdraw the offer. Investors should hold their position to await further developments, including the formation of a special committee and the outcome of negotiations, before making a definitive decision. The fixed price limits upside potential if the offer is accepted, but the current proposal provides a floor for valuation in the short term.

Keywords

Kennedy-Wilson Holdings, Fairfax Financial Holdings, William J. McMorrow, Kona Management Holdco, Schedule 13D, beneficial ownership, tender offer, merger proposal, real estate investment, insurance holding company, corporate acquisition, shareholder proposal, private equity, takeover bid