Quindell in talks to sell legal services arm to Slater & Gordon
Stock exchange: Quindell confirms talks
Alternative business structure Quindell is in talks to sell an operating division to Slater & Gordon, it was announced yesterday, while due diligence on personal injury file transfers is currently close to completion.
Confirming rumours that have been circulating for a few days and were first published online earlier this week, leading to a 15% jump in its share price yesterday, Quindell issued a statement after the close of trading.
It said: “On 2 January 2015, Quindell plc announced it had entered into exclusivity arrangements in respect of the possible disposal of an operating division of the group.
“The company notes the speculation concerning the identity of the third party and can confirm that Slater & Gordon Limited is the party referred to in previous announcements.
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“There can be no certainty that these discussions will lead to an offer for, or the disposal of, an operating division of the group.”
The operating division is said to be Quindell Legal Services (QLS), which as we reported earlier this month lost its chief executive at the end of the 2014.
This was followed by a Slater & Gordon statement overnight. It said: “SGH [Slater & Gordon’s stock exchange code] confirms that, consistent with our previously communicated UK growth strategy, SGH has entered into exclusivity arrangements with Quindell in respect of discussions relating to a possible disposal of an operating division of the Quindell Group. These discussions remain preliminary and incomplete.
“As part of these arrangements, SGH is completing due diligence on a portfolio of Quindell personal injury litigation case files with rights to take a transfer of files over the coming months.
“Contrary to press speculation today, SGH has not submitted any offer or proposal beyond the file transfer transaction. The file transfer transaction is not material. SGH will further update the market as appropriate.”
Slater & Gordon’s group CEO, Andrew Grech, confirmed to Legal Futures that these are essentially separate transactions. The firm was “in the process of completing” the file transfer deal, he explained.
Mr Grech added that they are considering the acquisition of “various assets” from Quindell.
Financial blogger Ben Harrington – who broke the story online – claimed yesterday that when talks first began, Slater & Gordon said it would pay a non-refundable £15m to enter into exclusive discussions with Quindell.
“Since then, the Australian law firm has been crawling over of Quindell’s legal services business, doing due diligence,” he said, citing “sources”. “I have also been told that Slater & Gordon, which is being advised by Greenhill, has indicated it could be willing to pay around six times sustainable revenue for the legal services division.
“Given QLS sustainable revenues are thought to be around £180m, the final sale price is looking pretty punchy. Sources say Slater & Gordon is willing to structure a deal with cash and using its own shares.”
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