R&q Insurance Share Discussion Threads

[simon gordon] 10/6/2022 19:34

Reinsurance News - 10/6/22:

What’s going on with 777 Partners’ R&Q Holdings shares?

In the wake of a failed attempt to acquire Randall & Quilter Investment Holdings Ltd (R&Q), it turns out a significant proportion of shares in R&Q owned by would-be acquirer 777 Partners were held as collateral to a loan by another party.

April 1st, perhaps a prescient date, it was announced that R&Q was set to be acquired by one of its major shareholders, Miami-based investment group 777 Partners.

The proposed deal valued R&Q’s share capital at approximately £482 million, with the acquisition vehicle Brickell PC Insurance Holdings LLC, which is backed by 777 Partners, also said to be intending to invest $100 million of new equity funding into R&Q.

R&Q had discovered a hole in some of its legacy reserves, making the funding essential.

At the time of the announcement in April, it was reported by R&Q that Brickell and its affiliates had a 23.2% shareholding in R&Q, but held 9.9% voting rights in the company.

R&Q was struggling to get sufficient investor support to approve the deal, subsequent to which it was reported that 777 Partners were pulling out of the acquisition.

A day later the deal had fallen apart after R&Q failed to gain shareholder approval, at which stage the legacy and program management specialist’s management said it would seek to raise the capital it needed on its own.

Fast-forward around two weeks and an intriguing filing was issued by alternative investments company Vida Capital.

Vida Capital is a specialist in life settlements and longevity insurance related investments, but also operates in some other areas of insurance related credit/debt financing we understand.

It states that the Vida Longevity Fund, LP, Vida Insurance Credit Opportunity Fund II, LP, and Vida Insurance Credit Opportunity Fund III, LP, are intending to sell 34,218,366 shares of ordinary shares of Randall & Quilter Investment Holdings Ltd.

It constitutes a notice of public sale under Article 9 of the Uniform Commercial Code, and we’re told that the details suggest 777 Partners had pledged these R&Q shares as collateral to a loan, or financing, supplied by Vida.

The filing states that the shares were pledged as collateral to the three aforementioned Vida Capital managed investment funds, which are the Secured Parties, by Brickell PC Insurance Holdings LLC (the Pledgor) and 777 Partners LLC (the Borrower).

Together, the filing names Brickell and 777 as the Debtors in this arrangement.

The sale of the shares is being held to “enforce the rights of the Secured Parties,” so the Vida funds.

Here, the information is lacking as to exactly what has triggered the rights to sell the R&Q shares that were pledged as collateral, but our sources have made two possible suggestions.

One, that the share price may have fallen below a peg, or predefined level, allowing the lender to sell the collateral. R&Q’s share price is currently down roughly 42% since the acquisition attempt was announced.

Or two, that the borrower is in default, in some way, to the loan or financing conditions and so the collateral can be sold to make good on the arrangement.

So, it appears 777 Partners or an entity owned by it had borrowed capital or been financed by entities operated by Vida Capital and that 777 had pledged the R&Q shares as collateral to it, giving Vida a first lien right to them.

That first lien right has now been taken, possibly for one of the two reasons mentioned above, allowing Vida to sell the shares.

But given the over 34 million R&Q shares represent roughly 12.5% of the legacy and program management firms’ share capital and this had been pledged to another party, while cited in acquisition announcements, it does make for an interesting nugget of information alongside this M&A saga.

It’s more than half of the shareholding 777 Partners was said to have in R&Q at the time of its acquisition attempt.

Was it fair to call these a shareholding if they were pledged as collateral elsewhere? Or did 777 have another 12.5% of R&Q’s shares, outside of the 23.2% shareholding cited?

Now these 34 million R&Q shares appear to have been forfeit to Vida to sell, although it’s not clear what, if any, value could still flow back to 777 from the sale.

For those interested, the notice of sale of the shares can be found here.

[spectoacc] 09/6/2022 14:01

Good point if not all of them, but this looks a way to guarantee getting a poor/dreadful price. Why not sell them via the usual channels? Give them to WINS or whoever to work through in the market.

The likely forcing down of the price is going to hit the value of what they've got left.

Almost looks like tail-swallowing - ie selling enough to be able to take up the equivalent number of offer shares. But again, this isn't how to go about it.

Think I'm with the "pledged collateral" theory.

[controlledmadness] 09/6/2022 13:55

I followed the link give. Brickwell is dumping about 12.4 percent of its shares.
They will take starting bids at 40 percent of share price so this looks like a dump for tax purposes.
I think they have or control about 21 percent at present.
This could also be vengeance as the bid is for the 20th June were the build will be on the 13/14th

[my retirement fund] 09/6/2022 12:25

What a stinking mess!

[spectoacc] 09/6/2022 12:21

Also bewildered, have never seen a notice like that before.

So at the same time as raising $100m, there's going to be a large chunk of existing RQIH shares up for grabs?

On the plus side - far more inclined to believe the co now, since Briknell clearly weren't wearing any trousers. And their pants were possibly flammable.

[varies] 09/6/2022 12:10

I remain bewildered.
When the share price stood at 125p with an offer of 175p on the table, some kind person seemed to be offering punters a gift ! We all know sadly that such apparent generosity is seldom what it seems.
Now the price holds up, albeit at a lower level, although the biggest shareholder is forced to sell.
RQIH seems to be the stake in a lively game of poker.

[petomi] 09/6/2022 11:09

What a mess. I was lucky enough to get out when the t/over was first announced but the price suggested much uncertainty about completion. But I can see why others stayed in (or even bought in when it looked like it might complete). The information flow has been very murky.

[simon gordon] 09/6/2022 09:49

Varies,

I feel for you mate. This is now going off the deep end.

[varies] 09/6/2022 09:44

SG
A Notice of Public Sale has just appeared on this site. Follow the link.
I was foolish enough on May 23 to buy more shares at 127.65p which I have just sold at 92.8p.
I still hold shares but am distinctly nervous about them. I feel like a small punter drawn into a game too big for me !

[simon gordon] 09/6/2022 09:41

Found the notice:

[simon gordon] 09/6/2022 09:30

Varies,

Jeezaloo.

Where did you pick that up from?

Cheers!

[varies] 09/6/2022 09:21

Was it generally known that Brickell's 34 million RQIH shares were pledged to the VIDA group of companies ? Certainly not known to me.
We learn now that the Vida companies have put this holding up for sale by auction in New York on 22 June to enable them to recover the loans secured on it. The holding is to be sold in its entirety in one lot and the reserve ( so I understand) is to be 40% of the market value determined by the AIM price on 15 June.
I wonder now whether Brickell had the resources to buy us all out at 175p and subscribe the $100 million cash shortfall required by RQIH in its Legacy business.
We were told in April that Brickell was controlled by Mr S.W.Pasco and that his principal investor was 777 Partners LLC. The Vida companies were not mentioned.

[simon gordon] 07/6/2022 16:55

Just watched a webcast of an RQIH fund raising roadshow.

Looks likely that the share will go into a coma for the next two years as the market waits to see if they can prove up 2024 and the $90m PTOP.

Adios amigos!!

Xx

[edmonda] 06/6/2022 08:45

Uncertainty re the failed takeover has hurt the shares of Randall & Quilter, but trading updates and a report on Portfolio Management suggest group underlying strengths remain intact - subject to completion of the planned fundraising.

New research note from Equity Dev recaps recent weeks' news:

[spectoacc] 01/6/2022 16:15

Some big trades through today, nearly all at 92.5p.

[spectoacc] 30/5/2022 11:21

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 14:12

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 14:10

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 13:38

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 13:08

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 13:01

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 12:53

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 12:15

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 12:05

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

[spectoacc] 26/5/2022 18:41

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".