Shore Capital acts as Joint Bookrunner for Randall & Quilter Investment Holdings Ltd


Randall & Quilter Investment Holdings Ltd (“R&Q”, the “Group” or the “Company”)

Placing and open offer to raise up to approximately £49.3 million

Randall & Quilter Investment Holdings Ltd., the non-life insurance and investment specialist, is pleased to announce that it has conditionally raised gross proceeds of £45.0 million through a firm placing of new ordinary shares (the “Placing”) with certain institutional shareholders and Directors and is proposing to raise gross proceeds of up to approximately £4.3 million through an open offer of new ordinary shares to Qualifying Shareholders (the “Open Offer”, and together with the Placing, the “Placing and Open Offer”).

The Placing and Open Offer is conditional upon the passing of certain resolutions. A circular (the “Circular”) is expected to be posted on or around 6 October 2017 notifying shareholders of a general meeting which is being convened for the purpose of considering the relevant resolutions, at 71 Fenchurch Street, Ground Floor, London EC3M 4BS on 30 October 2017 at 11.00 a.m.

A total of 34,883,720 new ordinary shares in the Company (the “Placing Shares”) have been placed by Numis Securities Limited (“Numis”) and Shore Capital Stockbrokers Limited (“Shore Capital”) (together, the “Joint Brokers”) pursuant to the Placing at a price of 129 pence per Placing Share (the “Issue Price”), raising total gross proceeds of approximately £45.0 million. The Placing Shares represent approximately 39.8 per cent of the issued ordinary share capital of R&Q prior to the Placing and Open Offer.

In addition, in order to provide Qualifying Shareholders with an opportunity to participate at the Issue Price, the Company is making the Open Offer to all Qualifying Shareholders to give them the opportunity to subscribe for up to 3,309,117 new Ordinary Shares (the “Open Offer Shares”) at the Issue Price to raise gross proceeds of up to approximately £4.3 million. The terms and conditions of the Open Offer will be set out in the Circular.

The Issue Price represents a discount of approximately 11.9 per cent to the closing price of 146.5 pence on 4 October 2017 (being the latest practicable date prior to this announcement).


Commenting on the Placing and Open Offer, Ken Randall, Group Chairman and Chief Executive Officer (“CEO”) said:

“We are delighted to have gained support for this capital raise to fund the significant growth opportunities ahead for the Group in our core activities of legacy acquisition activity and the writing of programme business on behalf of reinsurers. We thank our major existing shareholders for their continued support and are pleased to welcome a number of new shareholders onto our register. We have provided the open offer element to enable our smaller and non-institutional shareholders to participate on equal terms.

“We believe this capital raise will represent a step change in the Group’s profile, providing enhanced access to quality business through balance sheet strength. The significant opportunities available to the Group in both of our core operations are now able to be fully harnessed and we look forward to the future with added confidence.”


Current trading and distributions

The Board was pleased to announce on 4 September 2017 that the H1 2017 result was significantly ahead of the equivalent period in 2016 driven primarily by record contributions from legacy transactions in the first half year of £19.1m (2016: £2.7m). The business has made excellent progress in deploying funds raised in the placing announced in February 2017. Additional capital has been injected into R&Q Insurance Malta and Accredited and the funds raised to pursue legacy transactions have already supported deals with others being finalised. The pipeline remains very strong. Accordingly, the Board increased the proposed interim distribution per share to 3.5p (2016 3.4p).

The process of simplifying the Group continues. This has allowed the Group to focus on core activities of legacy and underwriting niche programme business on behalf of high quality reinsurers. The key recent disposals by the Group were:

–     The Lloyd’s managing agency sold to Coverys for $22.6m, representing a gain of £12.6m over carrying value (subject to regulatory approval); and

–     Triton, a Norwegian insurance manager, sold during the period.

Additional disposals are currently being progressed and the Board will update the market on those disposals in due course.

As a result of these announced disposals, expected disposals and ongoing trading performance, the Board expects net asset value per share (excluding goodwill) to be in the range of 136 pence to 146 pence at the end of the current financial year (after payment of the interim distribution, and before the impact of the issue of the New Shares and any currency movements).


Background to and reasons for the Placing and Open Offer

At the centre of the Group’s simplification strategy is the Group’s focus on (1) its core legacy acquisition activity and (2) fee generation in Accredited and R&Q Insurance (Malta) through its underwriting MGA/programme business, primarily on behalf of well-rated reinsurers. The Directors consider that the outlook looks strong for the Group as it capitalises on opportunities driven by, but not limited to, regulatory changes impacting large underwriters globally, macroeconomic effects, Brexit and separation of distribution from underwriting capital.

Summary of current pipeline:

(i)   Accredited: multiple loss portfolio transfer (“LPT”) and assumption opportunities from US insurers and especially self-insured groups. Multiple MGA/programme opportunities with gross written premiums (“GWP”) ranging from $5 million to $40 million; and

(ii)   R&Q Insurance (Malta): various MGA/programme opportunities as well as captive transfer and LPT mandates.

The first six months of 2017 alone saw the Group complete 11 legacy transactions across the US, Bermuda and UK markets. Four MGA/programmes were also signed by R&Q Insurance (Malta) and Accredited.


Use of the Proceeds from the Placing and Open Offer

The Company intends to raise gross proceeds of approximately £49.3 million pursuant to the Placing and Open Offer.

It is expected that the net amount of cash available to the Company following the Placing and Open Offer will be up to approximately £47.6 million, which it is intended to use as follows:

(i)   a £30 million capital contribution to R&Q Insurance Malta to grow its balance sheet, help secure an A- rating, and support its solvency capital ratios during its expansion. The credit rating and increased size will, in turn, open up further MGA/programme business with higher commission rates. A credit rating should also expand the universe of legacy transaction opportunities, especially loss portfolio transfers of larger, rated insurance groups’ discontinued portfolios. The Directors consider it likely that there will also be other intra-group structuring and solvency capital benefits; and

(ii)   a $25 million capital contribution to Accredited, the Group’s A- rated US carrier, which will raise Accredited into the size ‘7’ category (defined as vehicles with $50 million to $100 million of net assets), opening up larger loss portfolio transfer opportunities and programme business alike.

Approximately £1.7 million of the gross proceeds will be used to pay fees and expenses (including VAT) incurred in connection with the Placing and Open Offer (including broking commissions and other fees).


Details of the Placing and Open Offer

Numis and Shore Capital are acting as joint brokers in connection with the Placing. The Placing is subject to the terms and conditions set out in the Appendix (which forms part of this announcement) and the Open Offer will be subject to the terms and conditions to be set out in the Circular.

The New Shares will be credited as fully paid and will rank pari passu with the existing ordinary shares of the Company.

The Open Offer has been structured so that the total consideration under the Open Offer is less than €5 million (or an equivalent Sterling amount) in aggregate. Therefore, in accordance with Section 85 and Schedule 11A of FSMA, no prospectus will be made available in connection with the matters contained in this announcement and no such prospectus is required (in accordance with the Prospectus Directive) to be published. Under the Open Offer, up to an aggregate amount of 3,309,117 Open Offer Shares will be made available to Qualifying Shareholders at the Issue Price, pro rata to their holdings of existing Ordinary Shares, on the basis of 1 new Open Offer Share for every 26 existing Ordinary Shares held on the Record Date.

The Group operates a progressive distribution policy. Distributions are made bi-annually and are typically paid in May / June and October / November. New shares issued under the Placing and Open Offer will not affect this policy. New shares issued under the Placing and Open Offer will be eligible for the dividend payment expected in May / June 2018. Without pre-judging the outcome, the Board has committed to reviewing whether it would be in the interests of shareholders to look at paying dividends rather than capital returns (which form the basis of the current distribution strategy). For the avoidance of doubt, any such change will not affect the progressive nature of the policy.

Application will be made to the London Stock Exchange for the New Shares to be admitted to trading on AIM and it is anticipated that trading in the New Shares will commence on AIM at 8.00 a.m. on 31 October 2017. Settlement of the New Shares in the form of Depositary Interests is expected to take place within the CREST system following Admission.

The Placing and Open Offer is conditional upon, among other things, Admission becoming effective, the Placing and Open Offer Agreement between Numis, Shore Capital and the Company, which was entered into today, not being terminated and the Resolutions to be proposed at the General Meeting being passed without amendment.


Directors’ participation in the Placing and Open Offer

Certain of the investors in the Placing have expressed the view that they believe it is appropriate for the executive directors to participate personally, and accordingly, the following Directors have confirmed that they support the Placing and Open Offer and they have agreed to participate in the Placing and subscribe for the following number of Placing Shares:




Number of Placing Shares


Value of Placing Shares at the Issue Price (£)


Total holding of Ordinary Shares  following Placing


Percentage of the Company’s enlarged issued share capital

Ken Randall





Alan Quilter





Tom Booth






These Placing subscriptions by the Directors named above, are considered to constitute related party transactions pursuant to AIM Rule 13 of the AIM Rules. Phoenix Asset Management Partners, (“Phoenix”) has agreed to subscribe for 7,955,257 Placing Shares in the Placing. Due to the size of Phoenix’s existing holding of 16,435,477 Ordinary Shares in the capital of the Company representing 18.7% of the current issued share capital, this transaction is considered to be a related party transaction pursuant to AIM Rule 13 of the AIM Rules. The Directors (excluding Ken Randall, Alan Quilter and Tom Booth) consider, having consulted with Numis, that the terms of the related party transactions are fair and reasonable insofar as shareholders of the Company are concerned. Immediately following Admission, it is envisaged that Phoenix will hold 24,390,734 Ordinary Shares representing 19.9% of the enlarged share capital (before the issue of any shares under the Open Offer). 


Proposed Board changes

The Board is also pleased to announce that, as part of its succession planning, in the summer of 2018 it is expected that Ken Randall will relinquish his role as CEO and continue as Executive Chairman.

At that time, Tom Booth will assume the role of Group CEO and a new Chief Financial Officer will be appointed. In addition, it is also expected that Alan Quilter will step down from the role of Chief Operating Officer (“COO”) to become Deputy Chairman and the Group will seek to appoint a new COO.



For the reasons given above, the Directors believe that completion of the Placing and Open Offer and the approval of the Resolutions are in the best interests of the Company and Shareholders as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions at the General Meeting, as they intend to do in respect of their own beneficial holdings of Ordinary Shares amounting to, in aggregate, 17,244,247 Ordinary Shares, representing approximately 19.7 per cent of the Ordinary Shares in issue as at the date of this announcement.


For further information, please contact:

Randall & Quilter Investment Holdings Ltd.

Ken Randall

+44 (0)20 7780 5945

+44 (0)7831 145 440


Numis Securities Limited (Joint Bookrunner, Nomad and Joint Broker)

Stuart Skinner

Charles Farquhar

Akshman Ori

Harry Trueman

+44 (0)20 7260 1000


Shore Capital Stockbrokers Limited (Joint Bookrunner and Joint Broker)

Stephane Auton

+44 (0)20 7408 4080


FTI Consulting

Edward Berry

Tom Blackwell

+44 (0)20 3727 1046



No action has been taken by the Company, Numis, Shore Capital or any of their respective affiliates, that would, or which is intended to, permit a public offer of the Placing Shares in any jurisdiction or the possession or distribution of this announcement or any other offering or publicity material relating to the Placing Shares in any jurisdiction where action for that purpose is required. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Persons into whose possession this announcement comes shall inform themselves about, and observe such restrictions.

No prospectus will be made available in connection with the matters contained in this announcement and no such prospectus is required (in accordance with the Prospectus Directive) to be published.


Numis Securities Limited and Shore Capital Stockbrokers Limited are authorised and regulated in the United Kingdom by the FCA and are acting exclusively for the Company in connection with the Placing and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to their clients nor for providing advice to any other person in relation to the Placing and/or any other matter referred to in this announcement.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Numis, Shore Capital or the Company or any of their respective affiliates or any of their respective directors, officers, employees, advisers or representatives (collectively, “Representatives”) as to or in relation to the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.

This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares. Any investment decision to buy Placing Shares in the Placing must be made solely on the basis of publicly available information, which has not been independently verified by Numis or Shore Capital.

This announcement contains certain forward-looking statements, beliefs or opinions, with respect to certain of the Company’s current expectations and projections about future prospects, developments, strategies, performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which sometimes use words such as “aim”, “anticipate”, “believe”, “intend”, “plan”, “estimate”, “expect” and words of similar meaning, include all matters that are not historical facts and reflect the directors’ beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this announcement is subject to change without notice and, except as required by applicable law, neither the Company nor Numis nor Shore Capital nor any of their respective affiliates nor any of their respective Representatives assumes any responsibility or obligation to update, amend or revise publicly or review any of the forward-looking statements contained in this announcement. You should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement. Any indication in this announcement of the price at which Placing Shares have been bought or sold in the past cannot be relied upon as a guide to future performance. No statement in this announcement is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company. Past performance of the Company cannot be relied on as a guide to future performance and persons reading this announcement are cautioned not to place undue reliance on such forward-looking statements.

The price of Ordinary Shares and any income from them may go down as well as up and investors may not get back the full amount invested on disposal of the Ordinary Shares.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the AIM Market operated by the London Stock Exchange.

Neither the content of the Company’s website nor any website accessible by hyperlinks on the Company’s website is incorporated in, or forms part of, this announcement.