Slater & Gordon Play Hardball Over Quindell

Interesting development as reported by  This Is

Quindell shares jump 27% as firm insists Aussie deal to buy legal arm is still on

Shares in embattled insurance technology firm Quindell leapt 27 per cent higher today as the firm allayed some fears over progress in a key takeover deal for part of the company.
In late morning trade, Quindell shares were up 20.5p to 96.5p after the group said it had extended the exclusivity period for discussions with Australian law firm Slater & Gordon Holdings relating to the possible sale of its legal services arm.
The UK firm said: ‘Discussions are progressing with SGH and the indicative terms being discussed would imply a significant premium to the Company’s market capitalisation at the close of trading on 20 February 2015.’
Reduced offer: Quindell had hoped to raise £1billion by offloading its legal services division

Reduced offer: Quindell had hoped to raise £1billion by offloading its legal services division
Although Quindell added that there ‘can be no certainty that these discussions will lead to an offer for, or the disposal of, the’ unit.
Despite this reassuring statement, Quindell is still thought to have been dealt a blow as Slater & Gordon is understood to have reduced the amount it will offer by a third.

The mooted price tag was £1billion when discussions began last month. But following due diligence it is understood that Slater has scaled back the amount it is willing to offer for the division to just £700million – a price at the bottom end of the original price range.
This is still far in excess of Quindell’s stock market value – which ended last week at just over £330million when shares closed at 76p.

But it is a blow for the company because it had hoped to raise £1billion by offloading the division, which accounts for around half the entire business.
The other part of the company makes car-monitoring technology used by insurance firms.
At their height, Quindell’s shares were worth £2billion.
But questions over its accounting practices last year and a scandal involving former directors selling shares saw the group lose more than 90 per cent of its value.
They have partially recovered on hopes of a strong bid for its legal business.
Quindell shares rose last week after Morgan Stanley took a 5 per cent stake in the business – only for the US investment bank to sell its holdings two days later, cashing in a profit of up to £4million.
The appointments of Booker chairman Richard Rose and former Old Mutual boss Jim Sutcliffe as chairman and deputy have also calmed stock market nerves.

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