Shares in insurer tracked higher as investors warmly accept management change.
SHARES in QBE Insurance tracked higher as investors issued a warm endorsement of the looming management shake-up at the insurer, including the planned retirement of long-serving chief executive Frank O'Halloran.
The shares came off a trading halt, finishing 1.3 per cent higher at $11.65. The move marked the market's first response to the announcement of the 65-year-old Mr O'Halloran's plans to retire. At the same time, institutional investors were rushing QBE's $450 million capital-raising.
QBE placed 42 million ordinary shares to institutions early yesterday at a price of $10.70 each. This represented a 7 per cent discount to the $11.50 a share before QBE entered a trading halt on Tuesday.
Strong demand from domestic and offshore institutional shareholders ensured the placement was well over-subscribed, QBE said. The raising was aimed at replacing QBE's tier-2 convertible debt just as regulators here and around the world take a tougher view on capital.
QBE will now push ahead with a $150 million raising from retail investors.
QBE this week named insider John Neal to take charge from Mr O'Halloran. The appointment capped off nearly two years of painstaking preparations for the retirement of Mr O'Halloran.
That announcement was overshadowed by a 45 per cent drop in QBE's full-year profit to $US704 million. The result revealed QBE was barely profitable in the second half after being hit by a string of natural disasters last year.
Goldman Sachs analyst Ryan Fisher said the market should not have been surprised by the choice of Mr Neal as the next chief executive. Mr Fisher noted that any concerns about a large-scale ''clearing of the decks", which often involved write-downs, were likely to have been dampened by the extended handover period and Mr O'Halloran's transition to the board.