Transaction Overview

Majestic Capital to Be Acquired by Bayside Capital Partners

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HAMILTON, Bermuda--(BUSINESSWIRE)--Majestic Capital, Ltd. (Majestic Capital) (Nasdaq: MAJC - News)today announced that it has entered into a definitive agreement to be acquired by Bayside Capital Partners LLC (Bayside Capital Partners) for $0.45 per share in cash, or an aggregate purchase price of approximately $7.8 million. The$0.45 per share in cash purchase price represents a premium of 105% to Majestic Capital’s closing price yesterday of $0.22. Bayside Capital Partners is a holding company, the principal members of which are Lancer Financial Group, Inc. (Lancer Financial), David and Timothy Delaney, and individuals who are, in some cases, shareholders of Lancer Financial.

Completion of the transaction, which is expected to occur in the first quarter of 2011, is subject to the approval of Majestic Capital’s shareholders, regulatory approvals, adoption of certain amendments to the governing documents of Majestic Capital’s Trust Preferred Securities, modification of Majestic Capital’s lease for office space in Poughkeepsie, New York on terms that are acceptable to Bayside Capital Partners, and other customary closing conditions. Lancer Financial has provided a financing commitment to Bayside Capital Partners for the full amount of the merger consideration.

James Scardino, Chief Executive Officer of Majestic Capital, said: "We are pleased to reach an agreement with Bayside Capital Partners. This transaction delivers a substantial premium to market price for our shareholders in circumstances in which it has been difficult for us to generate alternatives from the capital markets. After a careful review of our strategic alternatives, our Board has concluded that this transaction provides the best opportunity to enhance shareholder value. The strategic relationship with Bayside Capital Partners, its members and Lancer Financial will allow us to improve profitability and take advantage of current market opportunities. It will also provide us with attractive long-term opportunities for our employees, customers and business partners."

Macquarie Capital (USA) Inc.is acting as the financial advisors to Majestic Capital. LMC Capital LLC provided a fairness opinion to Majestic Capital’s Board of Directors and its Special Transaction Committee of independent directors.

About Majestic Capital, Ltd.

Majestic Capital, Ltd., through its subsidiaries, is a specialty provider of workers' compensation insurance products. The Company seeks to provide quality products and services that fit the needs of its insureds and is dedicated to developing and maintaining a mutually beneficial, long-term relationship with them. The Company's workers' compensation insurance coverage is offered to employers in California, New York, New Jersey, Arizona, Nevada, and other states. Further information can be found on the Company's website athttp://www.MajesticCapital.com.

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