Thorn leaps on bid

SHARES IN Thorn, the beleaguered Radio Rentals group, soared by 37 per cent yesterday after it announced it had received an approach that could lead to an offer for the company.

Thorn was forced to issue a statement by the Stock Exchange to explain a sharp rise in its share price. It is understood that the Exchange has now launched an investigation into recent share dealings in the company.

Thorn refused to identify the potential bidder, although the City speculated that a financial buyer might be tempted to mount a bid for the cash-generative business and then sell off the unwanted parts. American buyers may also see Thorn as an under-valued asset.

At yesterday's closing price, up 60.5p to 221p, Thorn is valued at pounds 824m. This is almost half its value when it was de-merged from EMI, the music group, in August 1996. Thorn's share price has been devastated by poor UK trading as well as US litigation over credit terms on rent-to-own deals.

Analysts said a bid would be a surprise given Thorn's problems. "It's nearly impossible to value the business because of falling profit expectations," one analyst said.

Thorn confirmed yesterday that it was already planning to break itself into two by selling its US business as part of a fundamental strategic review of the business designed to help restore profits. It has received indicative offers from American rivals for its US operations. Analysts believe competitors such as Renters Choice, RTO and Aarons are likely to have expressed an interest in buying the business and could also consider mounting a takeover for the whole group.

Granada, Radio Rental's main competitor on the UK high street, said yesterday that it was not behind the bid approach. Analysts said Granada was unlikely to launch a takeover as it would raise severe competition concerns in the UK.

Thorn's profits have been hit by a decline in its core Radio Rentals business, due to a rise in insurance premium tax and a trend for consumers to buy TVs and videos instead of renting them. Growing litigation fears in the US over rental agreements entered into by its 1,400 strong Rent- A-Center chain have also hit the group's share price.

This poor performance culminated in Mike Metcalf, the group's chief executive, leaving the group last February, halfway through a strategic review. He was replaced in February by Steven Marshall, previously Thorn's finance director.

Mr Marshall has set about cutting costs and running the business for cash. Around 90 stores have been closed.

Thorn made pre-tax profits of pounds 171m on turnover of pounds 1.6bn last year. Retail analysts expect profits to fall in the year to March 1998 to around pounds 120m and to pounds 105m the year after.

Outlook, page 21

PROMOTED VIDEO
Arts and Entertainment
Outlaw Pete is based on an eight-minute ballad from Springsteen’s 2009 Working on a Dream album
arts + entsFirst tale will be about bank-robber called 'Outlaw Pete'
News
Bill Kerr has died aged 92
people
News
Angelina Jolie with her father Jon Voight
people
Sport
footballPremiership preview: All the talking points ahead of this weekend's matches
Arts and Entertainment
Tulisa as a judge on the X Factor in 2012
tvLouis Walsh confirms star's return
Life and Style
fashionClothes shop opens on Bill Clinton Boulevard in Pristina
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
Warner Bros released a mock-up of what the new Central Perk will look like
tv'Friends' cafe will be complete with Gunther and orange couch
News
Keira Knightley poses topless for a special September The Photographer's issue of Interview Magazine, out now
people
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
Life and Style
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SAS Business Analyst - Credit Risk - Retail Banking

£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...

Project Manager - Pensions

£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...

KYC Analyst, Birmingham - £200-£250 p/d

£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...

Test Manager - Banking - Yorkshire - £450 per day

£400 - £500 per day: Orgtel: Test Manager - Banking - West Yorkshire - £400-£5...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone