Price for Quinn stake not agreed, says Liberty

LIBERTY MUTUAL’S chief Ted Kelly said that the group has not agreed a price with Anglo Irish Bank to acquire its 49 per cent stake in the joint venture that is set to acquire Quinn Insurance Ltd (QIL).

“We haven’t discussed that,” Mr Kelly said in Dublin yesterday. “The courtship has ended, the marriage has begun, we haven’t yet discussed divorce.” But Mr Kelly said Liberty’s intention is that “we buy the whole company”.

When asked if Liberty and Anglo had agreed a seven-year timeframe for their joint venture, its president David Long said: “There’s an exit strategy but with no fixed timetable.”

Liberty, the third-largest non-life insurer in the US, is taking a 51 per cent stake in a new company that is acquiring QIL and is providing €102 million in working capital for the insurer.

Anglo owns the balance and has provided €98 million in capital.

With no acquisition price paid and QIL having assets in excess of the capital injected, has Liberty gained control on the cheap?

“We acquired a shell of a company with no capital,” Mr Kelly said. “We recapitalised the company, we’ve picked up the liabilities and risk. The capital going forward is at risk.

“There are plenty of other people out there who weren’t willing to make it work. We were the last one in. That’s an indication of value not being perceived by other potential buyers.

“I wish I could say we got a hell of a deal. Going forward we’ll have to work hard to make this thing work for us,” he added.

Mr Kelly said he expects to get regulatory approvals for the takeover of QIL in September. The business will be given a new brand but Mr Kelly said the name has not yet been chosen. It will be promoted through a major “publicity campaign”.

Mr Kelly said that a new chief executive would be chosen from “within the Liberty family”.

Mr Long said Liberty would be a “lot more sophisticated in pricing than the prior owners”.

He said the company was not daunted by the prospect of taking over QIL.

“We’ve taken over troubled companies before,” he said. “Quinn is a solid company in a market that we consider to be a very good market. It will live and stand on its own.”

Mr Kelly and Mr Long met with QIL’s 1,600 staff in Enniskillen, Cavan and Blanchardstown on Tuesday. Mr Kelly said he was “very pleased with the reception” they received.

“We admire how they [the staff] kept the business on the rails and we are looking forward to growing the business,” he added.

Mr Kelly confirmed Liberty had acquired the three buildings that QIL will operate from and said this was a sign of its commitment to the Irish operation.

He said Liberty has no plans to outsource any of QIL’s activities.

“We don’t outsource in any market for services in that market. That is part of our strategy and philosophy.”

Mr Kelly said he had not met QIL’s founder Séan Quinn.