Randall & Quilter Investment Holdings on Friday said it has accepted a £482 million takeover offer from 23% shareholder Brickell PC Insurance Holdings.
Brickell will pay 175 pence in cash per R&Q share, a 20% premium to its closing price of 146p on Thursday. The stock was up 13% early Friday in London at 164.95p.
Despite holding 23% of R&Q shares, Brickell has only 9.9% of the voting rights under an agreement related to its exchange of preferred stock last year. The offer also has support from R&Q directors for their 3.3% holding.
Brickell has committed to provide $100 million in new equity funding to R&Q to de-leverage its balance sheet.
R&Q is a Bermuda-based specialty non-life insurance company with Program Management and Legacy Insurance businesses. Brickell is controlled by Steven Pasko whose investment firm 777 Partners is based in Miami.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: marginally higher at 7,518.95
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Hang Seng: down 0.1% at 21,974.50
Nikkei 225: closed down 0.6% at 27,665.98
S&P/ASX 200: closed down 0.1% at 7,493.80
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DJIA: closed down 550.46 points, or 1.6%, at 34,678.35
S&P 500: closed down 72.04 points, or 1.6%, at 4,530.41
Nasdaq Composite: closed down 221.75 points, or 1.5%, at 14,220.52
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EUR: down at $1.1055 ($1.1111)
GBP: down at $1.3121 ($1.3155)
USD: up at JP¥122.45 (JP¥121.43)
Gold: down at $1,933.70 per ounce ($1,941.55)
Oil (Brent): down at $103.64 a barrel ($108.02)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday’s key economic events still to come
EU-China virtual summit
0955 CEST Germany manufacturing purchasing managers’ index
1000 CEST EU eurozone manufacturing PMI
1100 CEST EU flash estimate euro area inflation
0930 BST UK manufacturing PMI
0830 EDT US monthly jobs report
0945 EDT US manufacturing PMI
1000 EDT US ISM manufacturing PMI
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Ukraine President Volodymyr Zelensky warned Russia is consolidating and preparing ‘powerful strikes’ in the country’s east and south, including besieged Mariupol, where a new attempt will be made Friday to evacuate civilians from the devastated city. Russia meanwhile threatened to turn off its gas taps to Europe if payments are not made in rubles, as US President Joe Biden ordered a record release of strategic oil reserves to ease soaring US prices. In peace talks this week, Russia said it would scale back attacks on the capital Kyiv and the city of Chernigiv, but Ukrainian and Western officials have dismissed the pledge, saying Moscow’s troops were merely regrouping. ‘This is part of their tactics,’ said Zelensky in a late-night address.
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The EU plans to use a virtual summit being held in Brussels on Friday to send a stark message to China that helping Russia in Ukraine is not in Beijing’s economic interest. The EU is to impress on China the consequences for relations with the bloc if Beijing offers ‘overt support’ to Russia’s invasion, now in its second month, a senior EU official told dpa ahead of the talks. The war in Ukraine is set to dominate the meeting, with EU officials being as concerned about China’s ability to prolong the conflict as their US counterparts. Beijing has given Russia political backing and has refused to condemn the invasion, portraying the US and NATO as the main causes of the crisis. The West is concerned that China could provide material support to Russia or help Moscow evade strict Western sanctions. Expectations ahead of the talks were low. No concrete outcomes, joint statements or press conferences are planned and neither Covid-19 nor climate change have made it onto the agenda.
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Growth in the Irish factory sector picked up pace in March, a survey showed, but manufacturers warned about the impact of the war in Ukraine on both supply and demand. The AIB Ireland manufacturing PMI rose to 59.4 points in March from 57.8 the month before. The February reading had been an 11-month low. The March reading was the joint ninth highest in nearly 24 years of survey data collection, compilers S&P Global said.
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Japan’s factory sector expansion hastened in March despite the prevailing global headwinds, survey results from S&P Global showed, with manufacturers remaining positive about the year ahead. The headline au Jibun Bank Japan manufacturing purchasing managers’ index rose to 54.1 points in March from 52.7 in February. This signalled the 14th consecutive improvement in the health of the sector, as anything above the 50.0 point mark signals expansion. The figure was ahead of the flash PMI for the month of 53.2 points, announced on March 24. Japanese manufacturers also recorded the sharpest rise in input prices since August 2008.
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BROKER RATING CHANGES
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Goldman Sachs cuts Segro to ’buy’ (conviction buy list) - price target 1,500 (1,690) pence
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Citigroup raises Bridgepoint to ’buy’ (neutral) - price target 480 pence
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Citigroup raises Lancashire Holdings to ’buy’ (neutral) - price target 525 (572) pence
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COMPANIES - FTSE 250
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Sanne reported a widened annual loss as its takeover by Apex Group progresses. Sanne is a London-based specialist alternative asset fund manager. Net revenue for 2021 rose 14% to £194.2 million from £169.7 million in 2020, but the firm swung to a pretax loss of £2.2 million from a profit of £20.5 million a year ago. Sanne booked non-underlying items of £50.8 million in the year, more than double the £24.1 million registered in 2020. These included costs related to its takeover by Apex. ‘Whilst the acquisition represents a good outcome for Sanne shareholders, it has resulted in a significant amount of additional transaction related costs in 2021,’ the company said. Apex had battled it out with Cinven for ownership of Sanne, and finally came to an agreement at 920 pence per share, which values Sanne’s equity at £1.51 billion. The stock closed on Thursday at 914.00p. ‘Despite the material distractions arising from well-publicised offers for the company during the year, 2021 has seen a strong financial performance from the group, with impressive double-digit growth and maintenance of healthy profit margins and cash conversion,’ the company said. Sanne said it now expects the deal to complete either late in the second quarter or early in the third quarter of this year.
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COMPANIES - MAIN MARKET AND AIM
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Clothing retailer Quiz said it expects to have swung to a slim profit over the last year for the first time since 2019. The business said that it expects to have made a profit of about £500,000 in the year to the end of March before tax. This would be the first time in three years that the business managed to become profitable. In the year ending March 2019 it made a £600,000 profit, but it has made losses of £3 million and nearly £10 million in the years since. The news came as Quiz upped its revenue forecast for the year. It said that the good momentum that it had seen over Christmas had continued through the last three months.
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Stockbroker Numis said interim revenue is expected to decline on a record performance a year before, with the firm confident on the M&A outlook but more cautious on capital markets. Revenue in the six months to the end of March is expected to be around £74 million, down 36% on the record performance achieved in the same period a year ago. M&A and Growth Capital Solutions delivered ‘strong’ revenue in line with a year ago, Numis said, but this was offset by a decline in equity capital markets activity across the industry which hurt Investment Banking performance. The outlook for M&A in the second half is positive, with the London-based stockbroker and investment bank describing its pipeline as strong. ‘The outlook for capital markets is less certain, however, markets have mostly recovered to levels apparent before the war in Ukraine, which gives us some confidence that market activity will recover to some extent during the second half. Whilst we do not anticipate IPOs to feature prominently in the near term, the current pipeline reflects the ambition of our broad corporate client base to finance their inorganic growth strategies,’ said Numis.
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Peer Peel Hunt said it has traded ahead of revised analyst expectations following February’s profit warning. The UK investment bank said its Execution & Trading business finished the year strongly, and revenue for the financial year that ended Thursday is expected to be around £131 million. This followed Peel Hunt in February warning that revenue for the year would be ‘marginally below’ the bottom of guidance and annual earnings ‘commensurately lower’ amid delays to its Investment Banking pipeline. The company on Friday said Investment Banking delivered record revenue for the year despite slowing activity across global capital markets amid worries over inflation, interest rates, and the war in Ukraine. The pipeline of deals in this arm remains strong, though there is ‘heightened execution and timing risk’ in the current environment.
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Friday’s shareholder meetings
Gfinity PLC - GM re fundraising
River & Mercantile Group PLC - AGM
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