Quindell share price dives as insurance firm is hit again amid RAC deal fears
Quindell, the insurance firm whose shares fell 60 per cent earlier this year following an attack by US short seller Gotham City, saw its shares plunge 12.05 per cent yesterday to 180.74p as fears grew around the future of a key joint venture with the RAC.
In April Quindell announced a £100m deal with the RAC to roll out Quindell’s telematic tracking devices, similar to the black boxes used in aircraft, to the RAC’s 2.5m members in order to help safe drivers reduce their premiums.
The timing of the rollout, which was intended to start in July but Quindell now says will be weighted toward the end of 2014, is reported to have caused disagreement. The structure of the deal, which included the RAC receiving a number of shares upon Quindell hitting a certain market valuation, has also caused friction as Quindell’s share price has fallen since April.
“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 [joint venture]. With regards to the timing of the roll out, we shall update the market when appropriate with the RAC,” said Quindell.