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Further information in relation to proposed Acquisition and New Equity Funding

25 May, 2022

Randall & Quilter Investment Holdings Ltd. (AIM:RQIH) (the “Company”, and together with its subsidiary undertakings “R&Q”), the leading non-life global specialty insurance company, provides a further update on the proposed recommended acquisition of R&Q by Brickell PC Insurance Holdings LLC (“Brickell”) (the “Acquisition”) and Brickell’s related commitment to provide US$100 million of new equity funding (the “New Equity Funding”).

At 18.47 (UK time) on the evening of Monday 23 May 2022, R&Q received a letter from Brickell alleging that R&Q is in breach of certain obligations under the implementation agreement in relation to the Proposed Transaction (the “Implementation Agreement”). In addition, Brickell claimed that the breach amounts to a material breach by R&Q of the terms of the Implementation Agreement and that Brickell is therefore exercising its right to terminate the Implementation Agreement with immediate effect (and therefore its obligations in relation to the Acquisition and New Equity Funding).

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. R&Q has since written to Brickell in such terms. Accordingly, in R&Q’s view the Implementation Agreement, together with Brickell’s obligations in relation to the Acquisition and New Equity Funding remain in full force and effect.

R&Q notes that the Special General Meeting (“SGM”) referred to in the notice to shareholders of the Company dated 27 April 2022 was adjourned to 4.00pm today, Wednesday 25 May 2022.

R&Q has received indications that, if the SGM is adjourned once more, the resolutions that need to be passed to enable the Acquisition and New Equity Funding to proceed may receive further shareholder support, potentially sufficient to enable the resolutions to be approved. Accordingly, unless R&Q receives contrary indications prior to 4.00pm this afternoon (being the allotted time for the reconvened SGM), R&Q intends to adjourn the meeting again to provide the opportunity for the relevant resolutions to receive the requisite level of support at the further reconvened SGM.

If, however, R&Q receives indications prior to 4.00pm today that, even with a further adjournment, insufficient shareholder support is likely or some Shareholders may change their existing vote in favour to be a vote against the resolutions, R&Q does not intend to adjourn the SGM again and will instead proceed to propose the resolutions at the SGM and R&Q expects such resolutions to fail.

Shareholders should be aware that if the resolutions are approved at the SGM (or at any adjourned SGM), given Brickell’s purported termination of the Implementation Agreement, there can be no certainty that Brickell will provide the US$100m New Equity Funding or in relation to the Acquisition generally.

Shareholders should also note that whilst R&Q may be able to seek to enforce the terms of the Implementation Agreement through the appropriate courts, there can be no certainty that such a claim would succeed or of the timescales for such a claim. In addition, Shareholders should note that, in the absence of an order for specific performance, Brickell’s maximum liability to R&Q under the Implementation Agreement in terms of damages may be US$12.5 million.

R&Q notes that, under the terms of the Implementation Agreement, R&Q is not entitled to conduct an equity fundraising without Brickell’s consent (such consent not to be unreasonably withheld, delayed or conditioned). Given the uncertainty relating to the Acquisition and New Equity Funding explained above, R&Q will, today, seek Brickell’s consent to progress a US$100 million equity fundraising so as to cater for R&Q’s funding needs given the potential failure of either the resolutions to be proposed at the SGM or of Brickell’s obligation to provide the US$100m New Equity Funding. R&Q is of the view that it would be unreasonable for Brickell to withhold such consent.

Shareholders will be updated further in due course.

Click here for the full press release.

Further information in relation to proposed Acquisition and New Equity Funding

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