R&Q says ‘strong interest’ from investors as it seeks new capital

Bermuda-based insurance group Randall & Quilter (R&Q) is seeking to raise more than $100 million in new capital, having dropped plans to pursue its proposed sale to 777 Partners-owned Brickell.

The move follows the buyer’s sudden move to terminate a £482 million deal due to a “material breach by R&Q of the terms of the Implementation Agreement” – something R&Q denies.

Now, in order to de-leverage its balance sheet and improve financial profile, R&Q is now seeking the new capital, which it said will help drive forward a “compelling new strategy and significant positive changes”.

The global specialty insurer announced late Wednesday (May 25) after its reconvened Special General Meeting (SGM) that it has failed to gain shareholders vote to proceed with its acquisition.

The move came shortly after Brickell delivered a letter declaring a termination of its £482 million deal to acquire R&Q with an additional commitment of $100 million of new equity.

But in a statement released late Wednesday following the outcome of the final shareholders vote, R&Q said it will now pursue a $100 million capital raise to make up the shortfall. “As the Transaction will not proceed, the Company is now focussed on raising approximately $100 million via a Placing and up to $8 million via an Open Offer (the Fundraise),” the company said.

Additionally, it noted that, following a short market sounding process, certain existing shareholders have indicated “strong interest” to subscribe for in excess of $100 million in the fundraise.

“Following the outcome of today’s vote, we will turn our focus to the fundraise,” said William Spiegel, executive chairman of R&Q. “Having prepared for this as an option when we originally engaged with shareholders, we are well placed to launch this shortly.

“Throughout this process our priority has always been delivering the best outcome for shareholders and the outcome of the vote has demonstrated the longterm value that investors see in the business.

“We continue to have great confidence in the future prospects for R&Q, and expect in excess of $90 million in pre-tax operating profit in 2024. We look forward to engaging with our shareholders on the fundraise.”