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Hornby says Phoenix takeover offer significantly undervalues company

Staff Writer | June 22, 2017
Hornby said the takeover offer proposed by Phoenix UK Fund Ltd on Wednesday "significantly undervalues" the company.
Acquisition   17.6 million shares at 32.375 pence per share
On Wednesday, Phoenix Asset Management Partners said Phoenix UK Fund Ltd has agreed to buy 17.6 million shares - or a 20% stake - in Hornby from New Pistoia Income at 32.375 pence per share, which it will then transfer to Aurora Investment Trust PLC, another fund managed by Phoenix Asset Management.

This would take the Phoenix concert party's stake in Hornby to 55.2% and would therefore require Phoenix UK Fund, under Rule 9 of the Takeover Code, to make a mandatory cash offer for the remaining shares in Hornby not already owned by the Phoenix concert party.

The offer is at the same price of 32.375p per share, valuing Hornby at GBP27.4 million.

On Thursday, however, Hornby said it believes the cash offer "significantly undervalues Hornby and its future prospects".

In addition, Hornby said it has appointed David Adams as interim chairman, following the resignation of chairman Roger Canham following the offer announcement on Wednesday.

Canham is also chairman of Phoenix Asset Management and earlier this year was called to step down by New Pistoia.

"The board also notes Phoenix UK Fund's belief that Hornby should maintain its AIM listing and its stated support for maintaining a board of directors that complies with the QCA Corporate Governance Code," Hornby said in a statement on Thursday.