R&q Insurance Share Discussion Threads

[spectoacc] 30/5/2022 10:21

Nothing much wrong with this morning's RNS, but surely largely uninvestable until the $100m is safely raised:


"William Spiegel, Executive Group Chairman, commented:

"We continue to be excited by the strong growth we are seeing in our Program Management business, and I am pleased to report another excellent quarter. We have established ourselves as a leading player in both the US and Europe and this is reflected in the long-term partnerships we have been able to sign with highly regarded managing general agents (MGAs), including two multi-year agreements targeting combined premium in excess of £3 billion. As we recently updated, Program Management remains on track to deliver $1.75 billion of gross written premium in 2022."


Also, if things are going so great, why were the Board so keen to sell at £1.75.

[simon gordon] 27/5/2022 13:12

breezer,

They found out about the hole in the balance sheet in Oct/Nov 2021 and told us about it on the 1st of April 2022.

[breezer_42] 27/5/2022 13:10

If Brickell had found anything else materially negative in the company's operations/finances, would the company not have been forced to RNS it?

[red ninja] 27/5/2022 12:38

Well the truth may emerge in time, but Brickell probably won't tell us if they want to dispose of their 23%. Presumably they are not going to back the cash raising either.

[simon gordon] 27/5/2022 12:08

What makes this peculiar is that Brickell own 23%. It's seems very odd to blow the share price up and leave such uncertainty, rather than walk away gently. 777 have incredibly deep pockets. This deal is chump change for them. Getting hold of Program at 175p was worth stretching for and it seems likely they could have got it if they wanted it hard enough. They were a fraction away but they blew it up 48 hours before the 2nd vote.

[red ninja] 27/5/2022 12:01

Yes my free trial has expired.

Often you hear nothing about why a company walks away.

I'm thinking in the current market their may be a few bargains and thus as Slater had put the deal in doubt they chose to go for easier and perhaps cheaper targets.

[simon gordon] 27/5/2022 11:53

Red,

"No information of why Brickell walked away."

That's the elephant in the room and maybe the insurance media will pick up on that angle in the coming days or weeks.

Saying that, this has just come in via Google alerts:



I've used up my free 14 day trial, would imagine yours has expired. Anyone else?

[red ninja] 27/5/2022 11:15

Brickell was offering £1.75 a share plus $100 million dollar of funding before they terminated so even in its current state you'd think they would be aiming for a £1 +.

The question is will the market support their price aspirations ?

No information of why Brickell walked away.

Where they put off by something or was it just that it is better to wait for the closer to the bottom in a falling market ?

[superadams] 27/5/2022 11:05

Looks like they may be aiming to try and get the placing away at nearer a quid.

[spectoacc] 26/5/2022 17:41

Hope "BearBull" in tomorrow's IC has had time to file copy on RQIH - he covered it last week with a "By the time you read this, my holding in R&Q may have had the bid voted through".

[simon gordon] 26/5/2022 10:09

afilip,

Got you!

For value to be unlocked they could/should sell Legacy and focus on Program.

It's Legacy that's killing the share price.

Or split the company.

[afilip] 26/5/2022 10:02

Agree, I meant it somewhat ironically, as Slater and co seem to think it’s worth far more than 175p.
They expressed interest to contribute the $100m, but I note that the placing has not been underwritten.

[simon gordon] 26/5/2022 09:50

afilip,

Brickell thought it was worth 175p plus $100m to plug the balance sheet.

Before the bid it was 140p without news of the $100m hole.

If they had released news on the balance sheet at 140p the share would probably have gone sub 100p. Now add into the mix that Brickell the largest shareholder has pulled their bid because of a "material breach" and in the 80s seems fair.

74% of shareholders wanted to sell the company.

Raising $108m with that story is not going to be a bundle of laughs.

[afilip] 26/5/2022 09:01

So if investors think R&Q is worth much more than 175p, why is it trading at 85p then?

[afilip] 26/5/2022 08:59

Sale of insurer Randall & Quilter goes up in smoke
Ben Martin, Banking Editor
Thursday May 26 2022, 12.00am BST, The Times
A big deal in the City has failed after Randall & Quilter investors resisted a US bid

The £482 million takeover of Randall & Quilter has imploded amid a backlash from the insurer’s shareholders and a U-turn by the US investment group that had wanted to buy the London-listed company.
Randall & Quilter needed the backing of 75 per cent of its shareholders at a vote yesterday for the sale to Brickell to go ahead, but revealed last night that it had fallen short of that threshold.
Its failure to secure sufficient investor support came just hours after it revealed to the stock market that Brickell was also trying to walk away from the deal, sending the insurer’s shares tumbling by 59p, or 42 per cent, to 81p.
Randall & Quilter unveiled its plan to sell itself to Brickell, which is also its biggest shareholder, at the start of April as it sought to shore up its finances. Not only was Brickell agreeing to take it private for 175p a share, but the US group was also pledging to provide $100 million of equity funding to plug a capital shortfall that Randall & Quilter had discovered in its finances.
The insurer will now attempt an alternative fundraising to fill the hole.
It was revealed by The Times this month that Slater Investments, another big Randall & Quilter shareholder, was opposed to the sale. The investor vote, originally scheduled for last Friday, was adjourned until yesterday to give the insurer time to win over shareholders after the scale of resistance to the deal became apparent.
A change of heart at Brickell added to Randall & Quilter’s woes. The insurer revealed yesterday morning that it had received a letter from its suitor alleging that it had breached the terms of the deal. Brickell claimed this gave it grounds to terminate their agreement, which Randall & Quilter disputed.
It said last night it would seek to raise about $100 million from a placing and up to $8 million from an open offer. Alastair Campbell, senior independent director at the insurer, said: “Our priority now is to secure the funding needed to de-lever our balance sheet and improve our financial profile.”

[simon gordon] 26/5/2022 07:31

Thanks Martin!

[martindjzz] 26/5/2022 07:28

Hi Simon, I've had a mate send me a photo of the Times article and it does not say anything other that what we already know from the R&Q press releases.

[simon gordon] 26/5/2022 06:12

Morning!

I see there is a piece in the Times today, any chance of copying it on here?

Do they mention why Brickell walked?

[topvest] 25/5/2022 20:11

They have really messed this situation up. It wouldn't have happened with Ken Randall still in charge in my view. They are looking at a c50p placing now, if they are lucky.

[afilip] 25/5/2022 19:07

Could it have been discussing a potential fundraising with other investors, perhaps without consulting with Brickell?

[simon gordon] 25/5/2022 18:20

I wonder what the "Material Breach" was? All Brickell had to do was accept today's vote. Why did they jump before the vote as it's just destabilised the price and created a higher level of uncertainty.

Spiegel looks to have played it very poorly and I wonder if he's going to be a casualty of the whole episode?

[superadams] 25/5/2022 17:44

Had it all not been done in a rush and retail holders sidelined, I actually thought this was the outcome many of us wanted in the first place.

[fred177] 25/5/2022 17:38

Superadams, your'e right i should wait to see the price

[spectoacc] 25/5/2022 17:30

Retail thrown a bone, but what sort of bone will it be - now a 2 week delay until the fundraise is actually undertaken/price known.

$100m not small in relation to the (now) market cap.

Major shareholders - presumably Slater & co - backing it. Despite the delay until pricing, seems generally positive.

"Following a short market sounding process, certain existing shareholders have indicated strong interest to subscribe for in excess of $100 million in the Fundraise."

"...In order to provide a wider group of shareholders with the opportunity to participate in the Fundraise, qualifying shareholders are expected to be provided with the opportunity to subscribe for ordinary shares in the Open Offer at the same offer price as the Placing for up to an aggregate value of $8 million.. "