Investors jump ship on Rear & Allen LSE-listed insurance SPAC

Investors largely bailed out on an LSE-listed SPAC on the prowl for insurance assets after founders said they had redirected towards the Lloyd's market and needed more time, and maybe more money, to bring a deal to fruition.

Financials Acquisition Corp, a SPAC which industry insiders Andrew Rear (pictured right) and William Allen (pictured left) floated on the LSE in April 2022 with £150 million in IPO funds at the ready, will redeem 82.5% of its ordinary shares after the change in direction opened the door for exits.

The SPAC will pay £130.4 million from its M&A escrow account and be left with £29 million, a filing from the SPAC indicated. Outstanding warrants were not up for redemption.

Management takes consolation on a claim that the average redemption on a similar SPAC deadline extension in 2023 is above 99%.

Financials Acquisition Corp ran up against its 15-month deadline for a deal and said it had turned its attention to a £1 billion capacity Lloyd’s business with major ILS ties.

Shareholders proceeded to approve the deadline extension to end-year before the 82.5% of holders moved for the door and asked for their money.

Management had said, when announcing the new direction, that it may yet ask shareholders to pony up “substantial funds beyond its existing amounts held in escrow.”

Financials Acquisition Corp could plug the widened funding gap via both the lingering shareholders and unspecified Lloyd's partners.

Some of the remaining shareholders “have expressed an intention to support the Company's proposal in raising additional capital,” management claimed.

“Management has also progressed discussions with potential Lloyd's syndicate partners and looks forward to providing an update to the market in due course.”

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