Reinsurance News

R&Q fails to get sufficient shareholder votes for acquisition at first attempt

20th May 2022 - Author: Steve Evans

Shareholder voting on the proposed takeover of Randall & Quilter Investment Holdings Ltd (R&Q), the non-life global specialty insurance company focused on program management and legacy transactions, in a deal backed by investment group 777 Partners, has been adjourned as the company seeks to gain additional support for the deal.

randall-quilter-rq-logoToday, at a special general meeting, R&Q asked its shareholders to vote on the proposed acquisition and injection of capital by existing shareholder 777 Partners.

The deal, which was announced at the start of April, values Randall & Quilter’s (R&Q’s) existing issued share capital at approximately £482 million, while Brickell PC Insurance Holdings LLC, a vehicle backed by 777 Partners, is also proposing to invest $100 million of new equity funding into R&Q as part of the arrangement.

That $100 million is deemed essential, given the emergence of a reserve hole that was revealed at the time of the deal being announced.

The Board had recommended the deal to shareholders and needed to secure 75% of shareholder votes across five related resolutions to move it forwards.

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But the initial votes appear to have fallen just short, with the company saying that three resolutions have not made the threshold, but are very close to it, while two others would be expected to pass it and a sixth was passed today.

However, for the acquisition and injection of capital to be approved, each of the first five votes must pass that threshold, something which could not be achieved today, it seems.

This has led to the adjournment of the process until next week, to enable R&Q management to liaise with investors and attempt to drum up the additional support necessary to drive the takeover through.

“The decision to adjourn the meeting was proposed so as to ensure shareholders have been given the time to consider the resolutions in the context of the current votes cast,” the company said this afternoon.

William Spiegel, Executive Chairman of R&Q, commented, “It was only following consultation with a significant majority of our shareholders, and careful consideration of their feedback, that the Board took the decision to proceed with recommending the offer and the $100m of new equity funding. Given the indication that a significant majority appear in favour of the proposed transaction, and our commitment to achieving a fair outcome for all our shareholders, we have decided to adjourn the meeting to enable us to engage with them further.”

A shareholder meeting will be reconvened on May 25th, where the requisite support for the takeover will be sought.

The acquirer, Brickell and its affiliates, currently have a 23.2% shareholding in R&Q, but hold 9.9% voting rights in the company.

Other key investors have pushed back on the deal, we understand, leaving the Board with work to do in order to garner the support necessary to push this through. Those efforts will clearly be continuing this weekend and up to the new meeting next week.

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