Phoenix signals full takeover of Hornby
A BATTLE among shareholders to put Hornby back on track has led to a £27.4million takeover offer.
Investment fund Phoenix Asset Management is buying out the model train maker’s second-biggest backer New Pistoia, which had campaigned unsuccessfully to appoint a new chairman amid claims the current leadership had “run out of energy”.
Buying New Pistoia’s shares will give Phoenix a 55 per cent stake, meaning it is obliged to make an offer for the rest.
Hornby’s other shareholders will be offered 32.375p per share.
Phoenix backed last year’s £8million emergency fundraising to support a turnaround of loss-making Hornby, which makes Thomas The Tank Engine train sets and owns the Scalextric, Airfix and Corgi brands.
The company had been derailed by supply problems and disruption from installing new computer systems and has responded by slashing product lines by 40 per cent.
Phoenix wants Hornby to retain its listing on the junior Aim market to maintain its profile and provide access to capital.
It said: “Phoenix intends to increase its understanding of Hornby and its longer-term strategy for delivering further earnings growth following the completion of its turnaround strategy by entering into further discussions with its management and the board.
“It is our intention to work collaboratively with the management and board to review all strategic options for the business including, but not limited to, acquisitions, disposals, licensing agreements, funding requirements together with management and board composition. Until the detailed strategy review is completed, no decisions have yet been made by Phoenix in relation to specific actions it would seek to take.”
Hornby has announced a narrowing of annual pre-tax losses to £9.5million from £13.5million.
Chief executive Steve Cooke said it had put “significant effort” into improving relations with customers and said its turnaround plan has improved cash flow and margins.