Shares in FKI jumped by almost a quarter last week following claims that the company was being stalked by an overseas bidder.
Having peaked at 175p, they closed the week at 158p, somewhat down on their high for the year. But analysts said the stock remained vulnerable to speculation.
FKI tried to dampen rumours, which were fuelled by claims that chairman Jeff Whalley, who stepped down three weeks ago, could head a buy-out.
Managing director Bob Beeston admitted Whalley had put an informal buy-out proposal before fellow directors last October but it had been rejected. Whalley’s proposal was believed to have been worth 200p a share, valuing FKI at about £1bn.
On Monday FKI said Whalley had confirmed that he was not going ahead with that proposal.
Beeston also dismissed suggestions of a rift between him and Whalley, insisting that the chairman’s resignation had been by long-standing agreement.
On the future direction of the group, Beeston said FKI was considering disposing of parts of the company and returning value to shareholders.
No transactions were likely in the next two-to-three months as it had first to clarify its tax position.
Whalley was unavailable for comment but James Barker, a fellow director at corporate investment vehicle Gartland Whalley & Barker, said he expected Whalley to look for opportunities in large industrial companies rather than have hands-on participation in GWB.