Quindell broken up after sell-off
Saga ends as Australian rival snaps up legal arm for £637m
QUINDELL will be broken up after agreeing to a £637m deal to sell the bulk of its business to an Australian rival.
Law firm Slater & Gordon has agreed the buy the scandal-dogged company’s legal division, which last year accounted for more than 80pc of its revenues.
A total clearout of the insurance claim handler’s board will follow the deal, ending a saga that has drawn the City’s junior AIM market and its regulators into disrepute. The Quindell name is also likely to be dropped to give the resulting company a ‘clean break’ with the past.
In a remarkable move, the company’s chairman yesterday admitted that the group had used ‘aggressive accounting’ in its legal business that had inflated some of its previous financial statements.
David Currie, who will quit once the deal completes, said that new accounting policies would make ‘significant changes’ to the way a ‘significant portion’ of the business reports its results. But he insisted that Slater had conducted full due diligence on the legal business and knew what it was taking on.
Andrew Grech, managing director of Slater & Gordon, said: ‘The business we are buying is of high quality with robust infrastructure and systems and good people.’
Quindell’s shareholders will receive £500m after the deal completes. Shares rose to as high as 180p – a level not seen since last summer – before easing to close 7p or 5pc higher at 145p.
The non- executive directors of the board will quit after the deal completes. Chief executive Robert Fielding will move with the legal division to Slater & Gordon.
The sump of Quindell that remains will be a ‘technology-centric’ firm that includes software, a car-moni- toring unit and claims processing technology. A handful of tiny companies bought by founder Rob Terry during a two-year acquisition frenzy – such as a solar panel installation firm and a scaffolding business – will also be offloaded in due course.
Richard Rose, chairman of cashand-carry group Booker who was drafted in at the start of the year, will become chairman. Former Old Mutual boss Jim Sutcliffe, who had been appointed deputy chairman, will step down once the sale completes but will stay as a consultant until the end of the year.
Both Rose and Sutcliffe received share options when they joined at the start of the year – but yesterday had to forfeit them because the share price rise was not due to their actions.