777 Partners backed insurer Brickell PC Insurance Holdings has written an open letter to the shareholders of R&Q Insurance Holdings expressing concern about the “recent significant deterioration of the business.”
Brickell had been set to acquire R&Q earlier this year in a deal that valued R&Q’s share capital at £482 million, but the arrangement was twice rejected by shareholders, and Brickell also alleged that R&Q had been in breach of certain obligations.
Since then, some aspects of the failed deal have also come under scrutiny, such as why 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.
The collapse of the deal and contentions surrounding it has also led to one major shareholder – Phoenix Asset Management Partners – calling for R&Q’s Executive Chairman, William Spiegel, to be removed.
And now, Brickell has also lent its weight to these calls, stating that it has “lost confidence in the ability of R&Q to deliver on its potential under its current leadership.”
Despite the failed deal, Brickell and its affiliates still maintain a 23.2% shareholding in R&Q, and have supported R&Q as a shareholder since 2019, including providing in excess of $105 million of equity funding to R&Q since 2020.
Writing to R&Q shareholders, Brickell explained: “We have attempted to engage the company directly to resolve these concerns but in our view the R&Q Board has not engaged properly with Brickell and other shareholders nor has it provided meaningful resolutions or strategies to alleviate shareholder concerns.”
“We have seen that Phoenix has written an open letter calling for a General Meeting to be held at which a resolution will be proposed for William Spiegel to stand down and we intend to vote in support of this proposal.”
Brickell also argued that, going forward, the R&Q Board should be led by an independent non-executive Chair, which it says would be “more customary for a group such as R&Q.”
Nevertheless, Brickell also assured that it remains “committed to our investment in R&Q as a long-term investor,” despite the apparent challenges faced by the firm.