Maiden to convert series A, C and D preference shares to common stock

By Mary-Katherine Stinson

Lexington, Ky., Nov. 10 – Maiden Holdings Ltd. said it intends to convert its series A, C and D non-cumulative preference shares into common stock, according to a press release.

Specifically, the conversion affects the company’s outstanding 8.25% series A non-cumulative preference shares (Cusip: G5753U120), 7.125% series C non-cumulative preference shares (Cusip: G5753U138) and 6.7% series D non-cumulative preference shares (Cusip: G5753U146).

The plan requires the variation of the terms of each of the preference shares, which must be affirmed by the vote of holders of two-thirds of the issued shares of each series.

The company reported in the press release that Maiden Reinsurance Ltd., which currently owns more than 73% of each series of the preference shares, has indicated it will consent to the required variations for each series.

A special committee of disinterested and independent directors established by the company’s board of directors unanimously approved an exchange ratio of three common shares per preference share. The value of each preference share exchanged will be equal to three times the price that is the lower of the closing price of the common shares immediately preceding the date of the exchange and the average closing price of the common shares on for the five trading days immediately preceding the date of the exchange on Nasdaq.com.

Maiden’s board has also approved the amendments to the certificates of designations for each series of preference shares and the exchange.

Following the exchange, the preference shares will no longer trade on the New York Stock Exchange and no shares will be outstanding.

Upon completion of the exchange, it is expected that Maiden Reinsurance will own about 29% of the common shares as of the date of the exchange, which will be eliminated for accounting and financial reporting purposes on the company’s consolidated financial statements. Maiden Reinsurance’s voting power with respect to its shares will be capped at 9.5% under the terms of the company bylaws.

Maiden stated it estimates an increase per common share book value of approximately $0.82 per share, subject to the determination of the final value of the preference shares and the exchange price.

The transaction is expected to be completed on or before Dec. 31.

Odeon Capital Group, LLC acted as financial adviser to the company.

Houlihan Lokey acted as financial adviser to the special committee.

The company is based in Hamilton, Bermuda.

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