Struggling Photo-Me surges on possible sale

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The Independent Online

Shares in Photo-Me, the ailing photo booth maker, received a boost yesterday after the company confirmed it is conducting a strategic review that could result in a takeover.

However, speculation that Arcapita Bank, the Bahrain-based private-equity company, is in talks with the company was untrue, sources close to Photo-Me said, suggesting another bidder has entered the fray.

Photo-Me has appointed the investment bank, JPMorgan Cazenove, to oversee a review of the company's operations. The shares surged 24 per cent to 106.5p after the statement, giving it a market capitalisation of more than £388m. It is understood that Arcapita considered a move some weeks ago but chose not to follow up its interest.

Photo-Me has two divisions: vending machines and the manufacture of development laboratories. It has about 33,000 of the former across the world, mostly Photo-Me booths where customers can have a picture taken and developed. The company also runs booths where customers develop pictures from digital cameras. It is the world's largest operator of photo booths.

Photo-Me shares struggled after a profits warning in January. Then, it said profit before tax in fiscal 2006 would be up to 15 per cent lower than in the previous year. It reported a pre-tax profit of £33m in fiscal 2005.