PHS shares soar on bid speculation

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The Independent Online

Shares in PHS Group shot up more than 11 per cent yesterday, after the workplace services provider confirmed stock-market rumours that it was in talks which may lead to a bid for the group.

Shares in PHS Group shot up more than 11 per cent yesterday, after the workplace services provider confirmed stock-market rumours that it was in talks which may lead to a bid for the group.

Although the company did not reveal the identity of the interested party, it is believed to be a private equity company.

In a statement to the market, PHS, which supplies everything from water coolers to hand-towel dispensers for employers, said only that it had received an expression of interest. "There can be no certainty that any offer will be forthcoming," it said.

Shares in the company jumped as much as 16 per cent, before closing up 11 per cent at an all-time high of 99.5p, giving the company a market value of £514m.

Hector Forsythe, an analyst at Evolution Beeson Gregory, said PHS would make an attractive buy for a private equity group. "PHS is a first-rate business," he said. "It's not growing very fast, but it's certainly throwing off cash. So it suits a private equity group, as they can put some debt on the balance sheet, and try to accelerate its growth."

Mr Forsythe said if PHS was not taken over, it would also be a potential consolidator.

Last month PHS said it had seen improving margins over the year to the end of March, and was on target to announce a 9 per cent rise in full-year profits when it reports next month.

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