£12m swoop to take over failing Hornby

AN INVESTMENT giant which normally snaps up failing insurance firms has launched a bid to take control of one of the world’s most famous toymakers.

Phoenix Asset Management – which specialises in so-called zombie insurance policies – has acquired a majority stake in Hornby and made a £12.3m offer for the rest of the company.

The firm revealed it had agreed to buy 20.9pc of the firm – which makes Airfix planes and Scalextric sets – from Hornby’s second-biggest shareholder – New Pistoia Income – bringing its total stake to 55.2pc.

The kind of policies that Phoenix runs are nicknamed zombies because the original company that sold them has usually long disappeared but the investment plans live on.

Roger Canham, Hornby chairman, resigned with immediate effect following the announcement.

The news came as the toymaker announced its full-year results, revealing a 15pc fall in revenues to £47.4m and losses of £9.5m. The Kentbased company issued a string of profit warnings last year, after it was hit with difficulties at its Chinese suppliers which badly disrupted its deliveries to customers. It has since embarked on a turnaround programme that has seen it reduce product ranges and cut back investment.