Quindell rises on rumours of full takeover by Slater Gordon

Shares in insurance outsourcer Quindell advanced further on Wednesday after rumours grew louder that Australian law firm Slater & Gordon (SGH) was contemplating a full takeover.

The potential deal was cited by the FT Alphaville team, who said "the story out there is that rather than SGH just buying the legal division or even part of it, it is now looking at a full takeover of Quindell" but reiterated that this was a rumour albeit "a very specific rumour and it is now in the public domain".

Melbourne-headquartered SGH, one of the world’s largest personal injury legal services businesses, is a current client of AIM-listed Quindell’s and has a number of personal injury business operations in the UK.

On Monday, Quindell said discussions were "progressing" with the ASX-listed firm, sending its shares soaring from around 75p to over 100p at one point with the statement that "the indicative terms being discussed would imply a significant premium to the company's market capitalisation”.

However, SGH responded that "no offer has yet been put to Quindell and there is no certainty that an offer will be put that is attractive to Quindell, or that a transaction will eventuate".

In January it emerged that the pair were in talks over SGH's potential purchase of Quindell's legal services division.

As Quindell generates a major proportion of its outsourcing earnings from its legal and health services businesses, it has cited the Australian firm as one of its closest peers.

The AIM-listed group has been hit with several controversies in the last year, most recently in November when founder Robert Terry was eased off the board after his share dealings were called into question.

In April the company was dismissed by New York analysts Gotham City Research as "a country club built on quicksand", which saw Quindell's market capitalisation more than halve from £2.5bn to less than £800m.

Calling this a "co-ordinated shorting attack", Quindell took to the courts and won, with Gotham failing to provide either acknowledgment or a defence against the libel proceedings calling