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Hornby steams higher on Phoenix Asset Management takeover offer

Published: 11:49 21 Jun 2017 BST

hornby model train
The offer values Hornby at £27.4mln

Shares in Hornby Plc (LON:HRN) steamed ahead this morning after the model train maker was the subject of a takeover offer from Phoenix Asset Management.

Phoenix – already the lossmaking toymaker’s largest shareholder – is snapping up a 20% stake from New Pistoia Income Limited, the same fund that failed with an attempt to oust chairman Roger Canham back in April.

Canham is unlikely to have to worry about being targeted again as he is also the non-executive chairman at Phoenix.

Given the unsuccessful coup, Pistoia has decided to cut ties and offload its 17.6mln shares in the Scalextric maker. That acquisition is expected to settle on 23 June.

The net result of that deal means Phoenix would own 55% of Hornby, meaning the asset manager is obliged under City rules to launch an offer for the rest of the shares it doesn’t own.

Those investors would get 32.375p a share – the same price Phoenix paid to New Pistoia – valuing Hornby at £27.4mln.

Phoenix has said it wants to keep Hornby’s listing on AIM rather than take it private in order to maintain transparency.

It added that it “recognises the importance of the management team and employees to the future success of Hornby” but said it couldn’t be certain of any changes until the ongoing business review has been completed.

Earlier this morning, Hornby announced that its turnaround strategy was on track as it saw losses narrow in the 12 months ended 31 March.

Hornby shares were up by 6% to 33p shortly before midday on Wednesday.

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