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 the long-serving chief executive Frank O'Halloran.
Shares in QBE came off a trading halt, finishing 1.3 per cent higher at $11.65. The move marked the first time the shares changed hands since Mr O'Halloran flagged his retirement.
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 oversubscribed, QBE said yesterday. The raising was to replace QBE's tier-two convertible debt just as regulators here and around the world are taking a tougher view on capital.
QBE will now push ahead a $150 million raising from retail investors.
This week it named insider John Neal to take charge from Mr O'Halloran. The appointment capped nearly two years of painstaking preparations for the retirement of the long-serving chief executive who has overseen more than 125 acquisitions in expanding QBE offshore.
However, the announcement was overshadowed by a 45 per cent drop in QBE's full-year profit to $US704 million ($654 million). The result revealed QBE was barely profitable in the second half after being hit by a string of natural disasters, which sent claims soaring.
Goldman Sachs analyst Ryan Fisher said the market should not have been surprised by the choice of Mr Neal. Concerns about a clearing of the decks, which often involves writedowns, are likely to have been dampened by the extended handover period and Mr O'Halloran's board transition, Mr Fisher said.