Toy maker Hornby says takeover bid undervalues

Model toymaker Hornby said yesterday that a takeover bid launched by Phoenix Asset Management “significantly undervalues” the company.

Phoenix said on Wednesday that it had commenced a mandatory takeover offer for the troubled firm, valuing it at £27.4 million, after picking up a majority stake.

But Hornby said the offer, made at 32.375p per share, “significantly undervalues” it and its future prospects.

The firm, which also owns Airfix and Scalextric, added that it will write to shareholders with a formal response to the offer, but strongly advised investors to take “no action for the time being”.

The investment fund agreed on Wednesday to buy 17.6 million Hornby shares from New Pistoia Income, giving it a 55.2 per cent holding in the company. This, in turn, triggered a mandatory offer for the remaining shares.

Phoenix said that Hornby will retain its listing on Aim, the London Stock Exchange’s junior market, as it allows it to benefit from access to capital and increased profile.