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Small cap movers: eve Sleep and Simba opt for separate beds as merger talks collapse

A look back at some of the more interesting stories from the junior market this week

Eve Sleep PLC - Small cap movers: eve Sleep and Simba opt for separate beds as merger talks collapse

Investors in eve Sleep PLC (LON:EVE) were treated to a rude awakening this week after merger talks collapsed between the struggling mattress maker and its competitor Simba Sleep.

On Friday, eve said it was “not the right time” to pursue a potential acquisition of Simba, deciding instead to focus on its recovery plans.

Eve’s shares have been suspended since 12 August, when the two firms confirmed that merger talks were taking place.

Their restoration, however, brought little solace for shareholders as the stock plunged 31% to 3.4p on the final day of the week.

The botched deal is unlikely to salvage eve’s reputation amongst investors, who suffered through a nightmare 2018 that saw its founder Jas Bagniewski ousted amid a series of what it called “strategic missteps” that resulted in sales falling below expectations.

Eve will now have to rely solely on its turnaround efforts to rebuild trust, although with the company pointing to “challenging” trading and an “uncertain economic outlook”, shareholders may be facing yet more restless nights.

The AIM All-Share was placid over the week, rising just 0.2% to 887.5, while the FTSE 100 dipped 0.5% to 7,327.5.

One of the junior market’s biggest risers in the week was StatPro Group PLC (LON:SOG), which soared 52% to 227p after accepting a £161.1 million takeover offer from Pittsburgh-based software firm Confluence Technologies.

The company, which provides software for the fund management industry, said investors representing around 65% of its shares had approved the deal, which will pay 230p for each StatPro share, a 55% premium on its Thursday close price.

Equatorial Palm Oil PLC (LON:PAL) doubled in value to 1.4p after news that it had shipped its first batch of crude palm oil from the port of Buchanan in Liberia.

Technology firm Watchstone Group PLC (LON:WTG) spun up 31% to 114.5p after agreeing to sell its Canadian healthcare business for £22.3 million, the proceeds of which would be distributed to shareholders.

Oiler Clontarf Energy PLC (LON:CLON) gushed 82% higher to 0.5p after positive signals from the Ghanaian government regarding the Tano 2A licence block, in which it owns a 60% stake. The group also reported that pre-tax losses for its first half had been cut to £123,000 from £237,000.

Meanwhile, biotech N4 Pharma PLC (LON:N4P) bounced 19% to 3.7p after saying it had made strides over the last six months in better understanding its Nuvec drug delivery system.

X-ray specialist Image Scan Holdings Plc (LON:IGE) also put on a blinding performance, climbing 35% to 1.2p after winning an £800,000 contract to provide its ThreatScan system to a European security firm.

A prominent faller was troubled recruiter Staffline Group PLC (LON:STAF), which tumbled 28% to 113p over the week as it issued a profit warning for 2019, citing “weak consumer confidence” and the “unprecedented levels of uncertainty” caused by Brexit.

Printed circuit board maker Trackwise Designs PLC (LON:TWD) was similarly on the back foot after warning that its full-year revenues and profits were expected to miss market forecasts. The shares plunged 37% to 80p in response.

Colefax Group PLC (LON:CFX) saw its shares snipped by 15% to 410p as the luxury fabric and wallpaper designer saw its sales dented by challenging market conditions in the four months to the end of August.

Energy supplier Yu Group PLC (LON:YU.) was in hot water after its shares sank 19% to 115p on the back of wider first-half losses and the scrapping of its interim dividend.

Surveillance systems group Petards Group PLC (LON:PEG) also flopped 15% to 17p after warning that its 2019 profits would be hit by order delays as a result of franchising decisions from the UK’s Department for Transport.

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