A major investor in AIM-listed insurer Randall & Quilter has rejected a £482m bid to take the company private, the Times newspaper reported on Monday.
Slater Investments, which owns 10% of Randall & Quilter, is unhappy with the 175p-a-share offer from US-based investment vehicle Brickell.
The takeover needs the backing of at least 75%, who will vote at a meeting on May 20 to approve the deal. Slater is also critical of the process by which Randall & Quilter, which is based in Bermuda, decided to sell itself.
“In terms of process it’s ludicrous and in terms of price it’s nothing like what we’d accept,” the reported quoted Slater chief investment officer Mark Slater as saying.
The takeover was revealed to the stock market at the beginning of last month and is designed to plug a capital hole at the insurer.
As well as buying the business, Brickell, which is Randall & Quilter’s largest shareholder, has agreed to provide $100m of equity funding to fill a shortfall the insurer has discovered in its so-called legacy business.
Brickell is backed by 777 Partners, an investment firm based in Miami, and holds a 23.2% stake in Randall & Quilter, although its voting rights in the insurer are capped at 9.9%, the Times reported
Slater was among leading shareholders who were told by Randall & Quilter of its sale plan before it was announced to the stock market. The process of making some investors insiders is known as wall-crossing and shareholders who are privy to confidential information are bound by rules to prevent market abuse.
Slater’s said it and other investors were not properly consulted in the private talks about whether they might have been prepared to put money into the insurer to plug the shortfall, which would avoid the need to sell to Brickell and allow them to remain invested in the business.
“It wasn’t even an item for discussion,” Slater said.
A Randall & Quilter spokesman said: “The board consulted with shareholders and carefully considered their feedback. Following this, the board took the decision to proceed with announcing and recommending the transaction having assessed that a substantial majority of investors were supportive of the transaction and would ensure that the vote would be successful.”
