The sale of Quindell’s professional services division moved a major step closed today after the company’s shareholders approved the disposal to Slater & Gordon.
In a short statement to the stock exchange, AIM-listed Quindell said the deal now remains conditional upon the approval of the Solicitors Regulation Authority and the Financial Conduct Authority.
Among those to vote in favour was Quob Park Estate, a new investment vehicle set up by Quindell founder and former chairman Rob Terry.
However, in a blog published earlier this week, Quob said it nonetheless viewed the deal as undervalued, “based on a circa 7 x PE of the road traffic accident related work of Quindell whilst Slater and Gordon trades on circa 21 x PE”.
The blog continued: “Incidentally Quindell itself should have been able to attract a similar multiple and would have meant that those assets being sold alone would have effectively supported the total peak valuation of Quindell of £2.4bn, even without the upside from noise-induced hearing loss work.”
However, it concluded that given the shorting attack suffered by the company over the last year and “the ability of the management and future board structure that is now to be in place to deliver on this underlying value”, the deal with Slater & Gordon was “in the best interests of Quindell shareholders at this juncture”.
At the Slater & Gordon end, retail investors have until Monday to buy new shares in the listed law firm to help fund the acquisition.
Around 70% of the £637m initial purchase price – £456m – is being funded through new shares, with the rest through bank debt. Shares were first offered to institutional investors, and it was fully subscribed in just three days, raising £312m. The offer to retail shareholders, which aims to raise £144m, opened on 9 April.
Separately Slater & Gordon announced yesterday that nearly 3m shares issued to “the principals and key individuals from the UK acquired firm Russell Jones & Walker will be released from disposal restrictions by consent”. It was the acquisition of Russell Jones & Walker that brought Slater & Gordon to the UK in 2012.
Slater & Gordon’s current share price is A$6.87, down from a peak in early April of A$7.55, but still way up from the A$4.50 it was a year ago.