Outsourcing firm hit by reports of a fall-out with RAC over £100m deal
Quindell’s share price plummeted by nearly 12% yesterday after rumours emerged that its £100m telematics deal with RAC had run into trouble.
The outsourcing firm’s share price closed at 181.75p yesterday, down 23.75p from its closing price of 205p on Friday.
In April, Quindell announced a joint venture with RAC with the aim of installing more than 2 million black boxes at a rate of 50,000 per month from July.
But the Financial Times suggested that the rollout was yet to start and talks about restructuring the tie-up have stalled.
The deal entitled RAC to receive 250 million shares in Quindell when the outsourcer’s share price reaches 50p or more in the two years following the agreement.
Quindell’s share price was 43p when the joint venture was announced in April but it fell later that month after the publication of a critical report by Gotham City Research.
The insurance claims processor has since undertaken a one for 15 share consolidation.
Friday’s 205.5p share price is equivalent to a 14p per share pre-consolidation price, and the stock would have to more than triple in value to 750p for the RAC to receive shares worth £125m by exercising its warrants.
Quindell has denied a fall-out with RAC.
It said: “Quindell has not fallen out with the RAC and continues to have a positive relationship, with a number of joint contracts in place including the CCS joint venture.”
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