R&q Insurance Share Discussion Threads

[red ninja] 01/4/2022 13:26

On the other hand if things go well I would think they would want to close the deal closer to August 2022 as other suitors might possibly emerge as time goes on.

[red ninja] 01/4/2022 13:23

Well I suppose Bricknell are thinking that if there other problems this deal timetable will give them time to walk away.

[rik shaw] 01/4/2022 13:18

So sell in the market today or wait and get c12% more assuming the deal does ahead with downside risk if it doesn't.

[red ninja] 01/4/2022 13:14

Although I note last line as :-

· Long Stop Date for Completion of the Acquisition: April 2023 (although may be extended in certain circumstances)"

It says that date could be "extended in certain circumstances". Thus in extremis it could be later that April 2023.

[red ninja] 01/4/2022 13:12

See below they are calling April 2023 a "long stop date"

"A long stop date is a date that is agreed upon for the property to be complete no longer than this date."

Thus we are talking about a completion date between August 2022 and April 2023.
However, hopefully closer to August 2022 than April 2023.


"The anticipated timeline for the Acquisition and New Equity Funding is as follows:

· Post Circular to approve the Acquisition and New Equity Funding: around week of April 25th 2022

· General Meeting of Shareholders to approve the Acquisition and New Equity Funding: around week of May 20th 2022

· Receipt of $70 million of proceeds from New Equity Funding in June 2022 and $30 million in August 2022

· Long Stop Date for Completion of the Acquisition: April 2023 (although may be extended in certain circumstances)"

[fred177] 01/4/2022 12:11

I am reading that the takeover wont be completed until April 2023 will shareholders have to wait until then to get £1.75?

I don't think Slater will be too happy either

[topvest] 01/4/2022 11:48

Its the nature of legacy capitive insurance companies. Anyone remember Tawa? I had shares in that one and still have - its being liquidated, and almost finished now, but returns were awful.

If you keep buying captive insurance companies, eventually something will come back to bite you.

Personally, I think Randall and Quilter jobs did an excellent job in the circumstances and did grow the business well in a very astute way.

It's just not worth much more than net asset value as a business, particularly given its always been capital intensive and doesn't throw off much cash. Long-term, they have delivered a healthy dividend and a 175p exit, so not bad versus the original listing. Obviously, not as positive as many expected. I suspect Phoenix won't be very happy!

[simon gordon] 01/4/2022 11:32

I bought into RQIH due to the quality of the newly installed top team, with the CFO buying 340K of shares last September. Gibson RE had launched and Accredited was firing on all cylinders. The future looked bright. The company looks to have been up for sale since the 8th of November when RQIH announced a vote on a change to the company bye-laws. So, the hole in the balance sheet probably surfaced in October. It looks like they started discussing this with shareholders / market in February and the share started falling on a potential fund raise.

All in all, it looks like the new top team have a lower quality asset than was sold to them by Messrs Randall and Quilter. They've had to save the situation by selling the company at the best price they could achieve. If R&Q were still in charge the share would have tanked and been almost worthless. The quality of the top team has saved shareholders a packet.

I would think the new top team are somewhat vexed that they've been sold a pup.

[red ninja] 01/4/2022 11:23

Mmm, the problem seems to stem from the time of the old management.

The new management have still got a reasonable exit price even given the problems a sign perhaps of how they are esteemed.

Yes, there is some risk in holding to the takeover as more problems may reveal themselves and the takeover may not go ahead.

I see there are big buys in the market at 1 million shares a time I wonder if that's Bricknell buying in the market at around £1.60 ie a good discount to the takeover pice.

[riverman77] 01/4/2022 11:10

Sold out a while ago as wasn't keen on the new management team or strategy. The current situation looks a bit of a mess and glad to be watching from sidelines. Agree, if I were a holder I'd use this as an opportunity to get out.

[asagi] 01/4/2022 09:53

correct, simon gordon.

It looks like it was 175p or a capital raise to fill a $100m hole. 175p takeover is the best result for shareholders in the circumstances. I'd be selling in the market this morning and moving on. I'd likely be counting myself lucky too.

Asagi (no position)

[martindjzz] 01/4/2022 09:14

I think we need to be told when the Board first became aware of the circumstances necessitating the capital raise.

[simon gordon] 01/4/2022 08:50

Considering the circumstances that is a good deal for shareholders. Otherwise, it would have been a bloodbath.

[hugodscott] 01/4/2022 08:24

I am staggered. The share price was above 175p only six weeks ago. If you look at the chart over the past two months it almost looks like someone has been steadily off-loading a few shares in order to drive the price down to around 145p and as a result make a 175p offer look vaguely acceptable. I am not a conspiracy theorist but I am genuninely amazed by this news this morning.

[topvest] 01/4/2022 08:21

Yes, a disappointing end result. I don't hold any longer but held for many years. Got a bit jumpy when Ken Randall retired and sold at 175.5p as it happens last tax year as I didn't like the quality of their earnings.

There was always the risk of something nasty coming out of the legacy portfolio, as it so often does in this line of business.

"Background to and Reasons for the New Equity Funding

The new R&Q management team took over in April 2021 and initiated an in-depth review of the Group's Legacy Insurance portfolio in Q4 2021. The review identified a potential c.$90 million2 non-cash, pre-tax charge associated with impairing a structured reinsurance contract that was previously capitalised as an asset on the Group's balance sheet. The impairment is due to the likely commutation of this reinsurance contract by a subsidiary to provide liquidity to meet anticipated claims which have recently accelerated above expectations. This subsidiary was acquired over 15 years ago and management believes it is in the best interest of shareholders to commute the reinsurance policy rather than fund future claims out of Group liquidity. Furthermore, in Q4 2021, the Group used meaningful cash capacity to fund collateral requirements upon certain reserve strengthening. The combined impact of these two items results in a need for c.$100 million of equity capital to de-lever the balance sheet and improve the Group's financial profile. The Group has received pre-emptive waivers from its bank lenders on its existing financial covenants until the earlier of a capital raise or the end of June 2022. In the absence of a capital raise or an extension of the waiver, it is likely that the Group would be in breach once the current waivers expire."

[riverman77] 01/4/2022 08:18

What a generous offer!

[speedsgh] 01/4/2022 07:32

175p per share seems a rather disappointing outcome for those who still hold. Seems like a good deal for Brickell...Recommended Acquisition of R&Q Investment Holdings - https://www.investegate.co.uk/randall---38--quilter-ld--rqih-/rns/recommended-acquisition-of-r-q-investment-holdings/202204010700098814G/

[red ninja] 25/3/2022 13:28

See there was a 741,000 number (ie £1million) shares trade today. It was listed as a sell, but it is often not clear whether a trade is a buy or sell.

I've been adding a few at this level although have to admit with all the problems in the world at the moment it's not always clear when is the best point to pick up a few.

[simon gordon] 03/3/2022 14:51

Looks like a new deal:

The Insurer - 2/3/22

R&Q behind $95mn casualty LPT with Hiscox

London-listed Randall & Quilter (R&Q) is the legacy specialist behind Hiscox’s $95mn casualty reinsurance loss portfolio transfer (LPT), The Insurer can reveal.

[lomax99] 03/3/2022 12:29

Plenty patience required here, tempted to average down but put off by the ongoing slide in the share price

[simon gordon] 25/2/2022 15:41

Fred,

Me too!!

Like you say, patience is key.

They are a Champions League team with a Championship rating.

[simon gordon] 25/2/2022 15:39

Pretty strange to keep shareholders in the dark about that sizable deal. I thought in the past all deals done were announced to the market. Had me thinking they might not make the 2021 forecast. Wonder how many Legacy deals they've done since September but not announced.

Last year they issued a Program update on the 22nd February.

Maybe we'll get an update on Program and Legacy in the coming days/weeks.

[fred177] 25/2/2022 15:36

thanks Simon im keeping faith