Hornby tries to derail its £27m takeover swoop

ShareS in troubled model train maker Hornby veered off the tracks in early trading yesterday after it formally told investors to reject a takeover offer it believes ‘significantly undervalues’ the firm.

hornby’s management made their disapproval of Phoenix asset Management’s £27.4m bid perfectly clear when the offer was made last month, despite shares jumping by 12pc on the news.

But yesterday, the Scalextric maker said it had written to all shareholders strongly urging them to reject the offer, adding that it also fails to consider the firm’s future prospects.

Phoenix was forced to make an offer for all the shares in hornby it does not own under City rules last month after a bulk purchase led its total stake in the firm to hit 55pc.

hornby, which also makes airfix model kits, has been struggling of late, recently revealing a loss of £6.3m for 2016 and kicking out chairman roger Canham – also the non-exec chairman of Phoenix.

The firm has been hit by chang- ing tastes in toys and supply chain problems, and is in the middle of a turnaround. Shares battled back by the close to end flat at 32.75p.

The FTSE 100 fell back into the red after Monday’s gains, down 0.27pc, or 19.86 points, to 7357.23.

Oilfield services firm Hunting was among the FTSe 350’s biggest winners after reporting that a boom in US shale oil drilling helped performance in the first half of the year. The firm saw £42.4m added to its value after it said this has led to better than expected performance in its perforated systems business – used to connect oil wells to reservoirs.

Despite this, the firm expects to report a drop in overall profit over the first half due to weak oil prices and low levels of deepwater drilling investment. Shares rose 5.2pc, or 25.7p, to 517p.

Shares in Wizz Air were off slightly despite the firm announcing passenger numbers increased by nearly a quarter year-on-year in June from 2m to 2.5m.

The eastern european-focused airline carried more than 25m passengers in the last 12 months, and recently announced new routes to and from romania, hungary and Bulgaria. But investors were dubious of the decision to order ten more airbus planes last month. Shares fell 1pc, or 25p, to 2384p.

Budget competitor Ryanair also had a strong June, with customers hitting 11.8m, up 12pc from a year before. Shares rose 1.4pc, or 0.25p, to 18.35p. Troubled tool rental firm HSS

Hire was one of the biggest small cap losers despite posting ‘ good progress’ in its efforts to spend less this year. In its results for the second quarter, the firm said it has already cut costs by around £10m and expects to easily reach target savings of between £11m and £13m for the year.

But investors were put off by the firm’s claims that performance will be stronger in the second half of the year because more people rent tools in the summer. Its full results for the first half will be published in august.

The last quarter saw hSS’s boss John Gill step down after the eight years at the firm as it posted losses of £17.4m in 2016, worse than its previous two years. Shares fell 3.3pc, or 2p, to 59p.

In the junior market, cancer treatment firm Angle announced that a study of 400 people has shown the success of its blood test for identifying ovarian cancer.

The study showed that angle’s Parsortix blood test can tell the difference between women with malignant and benign tumours with up to 95pc accuracy.

Shares in the company rose throughout the day but closed down 1.5pc, or 1p, to 67p.