Regent Inns has held preliminary talks with a number of suitors interested in buying the pubs and leisure group, a spokesman said yesterday. But the company, which last month issued a profits warning, said there was no guarantee any of the approaches would lead to an offer and refused to say where they had come from.
Analysts believe the most likely bidders for Regent, which has a market capitalisation of £24m, are smaller, privately owned pub groups rather than larger companies such as Punch Taverns or Mitchell & Butler. Greg Feehely, head of research at stockbroker Altium, said: "It's a larger deal than first appears because the company has £70m of debt, but the deal is still sub-scale."
Regent's share price rose 4.5p to close at 21p last night following news of the approaches, but remains well below its high point of 118p, reached last April. The company, which owns the Walkabout chain of bars, as well as the Jongleurs comedy club group, has struggled in the face of declining consumer confidence.
Yesterday, Regent warned that there was no immediate prospect of recovery, saying it "continued to experience more challenging market conditions against a background of a difficult consumer market generally".
Simon French, an analyst at Numis Securities, added: "This is the only option left to [Regent] – we have said before that the only reason to invest in it is in the hope of a takeover."
Regent's largest shareholder is now the Channel Islands-based investment company Sanne Trust, which has this week increased its stake from 9 per cent to a little under 15 per cent. Sanne is believed to be working on behalf of a potential bidder for the company, but has yet to reveal its intentions.
Paul Hickman, an analyst at KBC Peel Hunt, said a price of 40p a share might be a realistic take-out price for the company. "This is an early-stage talks announcement so any view must be speculative," he said. "However, the talks are with more than one party."
Mr Hickman pointed out that Regent owns freehold and long leasehold property worth around £27m.