Quindell chairman Rob Terry and two other directors have between them spent nearly £2m in buying shares in the company, in the latest bid to boost investor confidence in the alternative business structure (ABS).
Quindell’s share price has steadily fallen since the spring; having been 240p four months ago, it dropped to 120p yesterday before rallying on the news of the share purchases to close at 132p.
Mr Terry has bought an extra million shares, taking his holding to 46.7m, or 10.7% of the company. Non-executive director Steve Scott bought 525,000 shares, meaning he now has 5.6m shares, or 1.3%. The extra 50,000 shares bought by finance director Laurence Moorse take his holding to 1.25m shares, or 0.3%. They all bought around the 123p mark.
To fund the acquisitions, the trio have each entered into a loan facility that a Quindell statement said “may result” in the transfer of up to 52m shares as security. It continued: “They are each required to redeem the transferred shares at maturity when the loan is repaid at the end of the two-year term and it is their full intention to do so.”
The loan facility has been arranged and the funding provided by Equities First Holdings LLC, a securities-based capital provider. Under the terms of the facility, the lender is contractually prohibited from short selling or voting the transferred shares during the term of the loan.
Mr Terry said: “As demonstrated by the purchases made by some of the board today and recently by other members of the board and executive team, we believe the current market valuation of the company is materially below its true value. The board remains confident of meeting full-year market expectations and of the company’s longer-term prospects.
“We are pleased that we have been able to secure funding to allow us to take advantage of this buying opportunity and to make these initial significant purchases of stock at these levels.”