Quindell begins to recover with £637m law deal
QUINDELL chairman David Currie said yesterday that the company’s deal to sell its professional services division to Australian law firm Slater & Gordon was a watershed for the group.
Shares in Quindell were up by over five per cent yesterday, after the £637m deal was confirmed. Currie told City A.M. it would help counter the damage done by the now infamous note published by Gotham City Research in April 2014. The US shortseller’s report caused the firm’s shares to plummet from around 600p to as low as 31p in December.
According to Currie, the firm “has got a lot closer to fair value” in recent weeks.
He said the Gordon & Slater deal was a recognition of the value of the legal services business. “Gotham City said it was literally worthless, which is clearly nonsense,” he added.
Looking ahead, Currie said Quindell plans to show the market that there is similar value in the technology business, and also to communicate more about the firm’s prospects. “It’s a new beginning for the business,” he said.
Augustin Eden, analyst at Accendo Markets, said that while the deal was “probably not enough” to completely counteract the effects of the Gotham City note, “it’s a start”.
“They have still got a way to go,” he added. “I don’t know if Gotham City will be proved wrong, they were probably right at the time. But it is possible to turn a company around – Quindell will be one to watch in 2015.”