• Maiden Holdings is set to merge with Kestrel Group LLC, with both becoming wholly-owned subsidiaries of Bermuda NewCo, which will be renamed Kestrel Group Ltd.
• A special meeting of Maiden shareholders is scheduled for April 29, 2025, to approve the merger.
• Following the filing of the proxy statement/prospectus, Maiden received demand letters and faced two lawsuits from shareholders alleging misleading disclosures regarding financial projections, data underlying the fairness opinion by Insurance Advisory Partners LLC (IAP), and potential conflicts of interest of IAP.
• Maiden denies the allegations but is supplementing its disclosures in the proxy statement/prospectus to minimize expenses and distraction from potential litigation.
• The supplemental disclosures relate to the Discounted Cash Flow Analysis performed by IAP and IAP's past relationship with Maiden.
• The supplemental disclosures also include additional information on how EBITDA was calculated for the projections.
• Maiden cautions that forward-looking statements are subject to risks and uncertainties, and actual results may differ materially.

Score: 4

Explanation: The sentiment is somewhat negative due to the shareholder lawsuits and the need for supplemental disclosures, although the merger is still proceeding.

• Maiden Holdings is addressing shareholder concerns regarding its merger with Kestrel Group.
• Shareholders have filed demand letters and lawsuits alleging misleading disclosures in the proxy statement/prospectus.
• Maiden is supplementing its disclosures to provide additional information on financial projections, the fairness opinion, and potential conflicts of interest.
• The special meeting to approve the merger is scheduled for April 29, 2025.
• IAP's discounted cash flow analysis indicated an enterprise value range of Kestrel on a standalone basis of $242 million to $295 million.
• IAP provided buy-side M&A advisory services to Maiden and its affiliates, for which it was paid a total of $50,000 since December 29, 2022, other than those services provided in connection with the transaction.
• Estimated unlevered free cash flow was calculated by applying an estimated 21.0% tax rate to EBITDA for each year, resulting in estimated unlevered free cash flow of $12.2 million in 2025, $18.5 million in 2026, $22.5 million in 2027 and $24.7 million in 2028.
• The terminal year estimate of EBITDA (pertaining to fiscal year 2028) was $31.2 million, resulting in the following undiscounted terminal values: (a) $343.6 million at an 11.0x multiple, (b) $374.9 million at a 12.0x multiple and (c) $406.1 million at a 13.0x multiple.

• Maiden is proactively addressing shareholder concerns by supplementing its disclosures.
• The company is aiming to minimize potential distractions and expenses associated with litigation.
• The merger with Kestrel Group is still on track, with a special meeting scheduled to approve the transaction.

• Shareholder lawsuits and demand letters indicate concerns about the fairness and transparency of the merger.
• The allegations of misleading disclosures could potentially delay or disrupt the merger process.
• The need for supplemental disclosures suggests that the initial proxy statement/prospectus may have been lacking in certain areas.

• The ongoing shareholder litigation could result in injunctions barring the consummation of the merger or damages resulting from the alleged violations.
• The special meeting of shareholders may not result in approval of the merger.
• The forward-looking statements regarding the merger are subject to various risks and uncertainties, and actual results may differ materially.

The document contains forward-looking statements regarding the completion of the merger and related projections, which are subject to risks and uncertainties. Actual results may differ materially.

• Maiden denies the allegations in the Complaints and the demand letters, denies that any violation of law has occurred and believes that the claims asserted in the Complaints and demand letters are wholly without merit.
• Maiden believes that the proxy statement/prospectus disclosed all material information required to be disclosed and denies that any of the supplemental disclosures are in any way material or are otherwise required to be disclosed.
• Solely to minimize any expense and distraction, and to avoid the uncertainty, of any litigation, and without admitting any liability or wrongdoing whatsoever, Maiden has determined to voluntarily supplement certain disclosures in the proxy statement/prospectus.

Mergers and acquisitions in the insurance industry often face scrutiny from shareholders and regulators, particularly regarding the fairness of the transaction and the adequacy of disclosures. This situation highlights the importance of transparency and thoroughness in the proxy materials provided to shareholders.

• The EV/LTM EBITDA multiples ranging from 11.0x to 13.0x used in the discounted cash flow analysis are within the typical range for insurance-related businesses, but the specific multiple would depend on factors such as growth prospects, profitability, and risk profile.
• Comparable companies in the insurance sector, such as Markel Corporation (which acquired State National Companies), often trade at similar EBITDA multiples.
• The discount rates ranging from 14.0% to 16.0% used in the discounted cash flow analysis are relatively high, reflecting the risk associated with Kestrel's business and the current market environment.

• Shareholders are impacted by the potential merger and the allegations of misleading disclosures.
• The outcome of the shareholder vote and the legal proceedings will have a significant impact on the value of their investment.
• Employees of Maiden and Kestrel are impacted by the potential merger and the resulting changes in the organizational structure.

• Maiden will hold a special meeting of shareholders on April 29, 2025, to vote on the merger with Kestrel Group.
• The company will continue to address the shareholder lawsuits and provide any necessary updates to the disclosures.

• Two separate complaints were filed by purported shareholders in the Supreme Court of the State of New York, County of New York against Maiden and its directors.
• The Complaints allege that the proxy statement/prospectus is misleading and/or fails to disclose material information concerning, among other things (i) certain financial projections; (ii) certain data and inputs underlying the financial analyses that support the fairness opinion provided by IAP; and (iii) potential conflicts of interest of IAP, and bring claims for negligence and negligent misrepresentation and concealment under New York law.
• The Complaints seek, among other things, injunctions barring consummation of the Transactions or, in the event that the Transactions are consummated, damages resulting from the alleged violations.

• IAP has, in the past, provided financial advisory services to Maiden and/or its affiliates for which IAP has received customary compensation.
• In particular, since December 29, 2022, other than those services provided in connection with the transaction, IAP has provided buy-side M&A advisory services to Maiden and its affiliates, for which it was paid a total of $50,000.

• December 29, 2024: Maiden entered into a Combination Agreement with Kestrel Group LLC.
• March 10, 2025: Maiden's annual report on Form 10-K for the fiscal year ended December 31, 2024, was filed with the SEC.
• March 20, 2025: Amendment to Maiden's annual report on Form 10-K for the fiscal year ended December 31, 2024, was filed with the SEC.
• March 24, 2025: Bermuda NewCo filed a registration statement on Form S-4 with the SEC.
• March 26, 2025: Maiden filed a definitive proxy statement on Schedule 14A in respect of a special general meeting of Maiden shareholders to approve the Transactions and related matters.
• April 9, 2025: A complaint was filed by a purported shareholder in the Supreme Court of the State of New York, County of New York against Maiden and its directors under the caption Nathan Turner v. Maiden Holdings, Ltd. et al., Case No. 652257/2025.
• April 10, 2025: A complaint was filed by a purported shareholder in the Supreme Court of the State of New York, County of New York against Maiden and its directors under the caption Mark Thomas v. Maiden Holdings, Ltd. et al., Case No. 154730/2025.
• April 21, 2025: Date of the current report (Form 8-K).
• April 29, 2025: Special Meeting of Maiden shareholders to approve the Transactions.