The price jumped by 10p to 77p, prompting chairman Iain Dale to admit that he had 'received an approach that may lead to an offer for the issued share capital of the company'. He added: 'It is emphasised that discussions are at a very preliminary stage.'
That is reliably understood to be an understatement as Dale has been in talks for about a month over what is widely seen as a rescue takeover for a company that has been sliding into difficulties. The share price settled at 72p.
The approach came in the wake of a pounds 933,000 loss for the six months to last October, which prompted a pounds 4.6m rights issue. The first-half outcome compared with a pounds 544,000 profit the previous year.
But as late as October last year the company was predicting a half-year loss of only pounds 700,000, suggesting that financial controls were not as tight as they could be. The deterioration also cast doubt on predictions that the group will declare a profit for the year to 1 May.
The price for institutional support for the rights issue was the removal of Christopher Coole as finance director, but he stayed on the board at Mr Dale's insistence.
Terry Smith, Mr Coole's replacement, has clearly got stuck in. On Friday, the company added: 'Following recent board changes, the board and its advisers are presently undertaking financial and operational reviews that are likely to involve a material reduction in the value of the group's net assets as at 1 May 1994.'Reuse content