A joint statement on Monday announced intentions of Maiden Holdings (MHLD, Financials) and Kestrel Group LLC to combine into a new publicly traded specialized insurance firm called Kestral Group. The deal comprises cash, equity, and earnouts and values Kestrel at $167.5 million.

• Warning! GuruFocus has detected 1 Warning Sign with MHLD.

Under the arrangement, each Maiden share owned will result in one share in the newly created Bermuda-based company. Approved unanimously by both boards, the deal seeks to be completed in the first half of 2025 depending on shareholder and regulatory clearances.

Executives claimed the new company would use a "balance sheet light, fee income" approach to improve efficiency in specialist insurance markets. Chief Executive Officer will be Luke Ledbetter; Executive Chairman will be Terry Ledbetter; President and Chief Financial Officer will be Pat Haveron. Emphasizing the strategic chance to leverage positive market trends and increase program efficiency, the management team stressed

Under AmTrust Financial Services, Kestrel will keep running under A.M. Best A-rated insurance carriers under option to purchase these carriers upon merger. In preparation for the merger, Maiden has temporarily stopped its share buyback initiative.

The business also gave information about a reserve review that was already publicized. As stated in its previous filings, Maiden anticipates costs in the fourth quarter totaling up to $150 million including impairments and negative reserve developments.

After the merger, the newly established Kestrel Group is scheduled to have Nasdaq listing for its shares.