LONDON (Alliance News) - Insurance claims processor Quindell PLC on Friday said it shareholders have approved the sale of its professional services division to Australian law firm Slater & Gordon.
Slater & Gordon is paying GBP637 million upfront to acquire the division, with a further deferred cash consideration due on fees from the division's legacy noise-induced hearing loss claims. The deal, having received the approval of Quindell shareholders, now needs regulatory approval from the Solicitors Regulation Authority and the UK Financial Conduct Authority.
Announcing the deal at the end of March, Quindell said the majority of the cash proceeds from the sale will be used to fund a "substantial" cash return to shareholders, which it expects to make in the second half of the year. Quindell said it expects the initial tranche of the shareholder return to be around GBP500 million, or in excess of GBP1 per share.
It added any further cash disposals would be dependent on the deferred cash consideration due related to the net fees from the settlement of noise-induced hearing loss cases handled by the professional services division. Quindell expects to receive 50% of the net fees from these cases, though it did not provide any guidance on how much it expects this to be, though it said that at March 29, the division was acting for clients on approximately 53,000 cases.
In addition to the deferred consideration, Quindell said any further cash distributions would be dependent on further non-core disposals and the underlying performance of the business.
Quindell didn't state the percentage of votes that were cast in favour of the acquisition.
Shares in Quindell were up 1.2% to 133.05 pence on Friday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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