Brickell calls off R&Q takeover deal after ‘material breach’

Shares in Randall & Quilter (R&Q) were down by nearly 29% as news broke that its suitor, Brickell Insurance Company, was backing out of the deal.

The proposed buyout - announced in April - valued the non-life legacy specialty business at about £482 million. Brickell, backed by Miami-based alternative investment firm 777 Partners, was also due to provide $100 million in new equity funding.

But R&Q announced the proposed acquisition and Brickell’s related funding commitment were off the table after it received a letter from Brickell alleging that R&Q was in breach of certain obligations in relation to the acquisition. 

Brickell claimed it was a “material breach” by R&Q and the company was exercising its right to terminate the transaction agreement.

“R&Q does not agree that it is in breach of the Implementation Agreement as suggested and therefore does not agree that Brickell has a right to terminate the Implementation Agreement,” said R&Q in a statement. “R&Q has since written to Brickell in such terms.

In R&Q’s view the commitment to purchase the company and provide new equity funding “remains in full force and effect”.

It added: “Given the uncertainty relating to the Acquisition and New Equity Funding explained above, R&Q will, today, seek Brickell’s consent to progress a $100m equity fundraising so as to cater for R&Q’s funding needs… R&Q is of the view that it would be unreasonable for Brickell to withhold such consent.”