Shares in under-the-cosh insurance outsourcer Quindell (LSE: QPP) have crashed to new lows today on news that founder and recently-ousted chairman Rob Terry has sold a whopping 25 million shares.
The announcement of the sale, which has netted Mr Terry well over £10m, comes hot on the heels of news that Quindell — “in conjunction and consultation with the Company’s bankers, advisers and auditors” — has engaged PwC to conduct an independent review of the company.
Last month, Quindell announced major share purchases by Mr Terry, along with finance director Laurence Moorse and non-executive director Steve Scott. Mr Terry said at the time:
“As demonstrated by the purchases made by some of the board today and recently by other members of the board and executive team, we believe the current market valuation of the Company is materially below its true value. The board remains confident of meeting full year market expectations and of the Company’s longer term prospects. We are pleased that we have been able to secure funding to allow us to take advantage of this buying opportunity and to make these initial significant purchases of stock at these levels”.
However, Quindell was subsequently obliged to admit that the “loan facility” the directors had entered into in order to make the purchases was, in fact, a sale and repurchase agreement. The directors had been net sellers of shares — 7.5 million in Mr Terry’s case.
A week after this scandal, Quindell announced that Messrs Terry, Moorse and Scott would be stepping down from the Board, with Mr Terry being retained as a consultant and Mr Moorse remaining in situ for the time being to ensure an orderly handover to a new finance director.
With Monday’s announcement that PwC is conducting an independent review of Quindell’s business — and news, also contained within the announcement, that cash receipts in the final quarter are below expectations — Mr Terry seems to have decided to cash in his chips.
After today’s sale, the architect of the Quindell empire still holds 13 million shares (2.99% of the company), but under major shareholder regulations any further sales are not required to be notified to the market.
In a further news release this afternoon, Quindell said it had signed multi-year contract renewals with insurance broker Swinton, and telematics insurance provider Insurethebox, as well as gaining a new contract with one of the UK’s leading motor-cycle insurers.
Quindell’s shares, which opened at 47p this morning, fell as low as 24p following the announcement of Mr Terry’s sale, and have recovered to only 35p (at the time of writing) on the contract news. The shares have lost some 95% from their peak valuation earlier this year.