Wardle Storeys shares rocket on bid news

Shares in safety equipment specialist Wardle Storeys rocketed last week after it revealed it had received a bid approach at 441p a share, valuing the group at £113.5m. The identity of the bidder was not disclosed, but it is believed to be a management buy-out led by Wardle chief executive Brian Taylor. The move was […]

Shares in safety equipment specialist Wardle Storeys rocketed last week after it revealed it had received a bid approach at 441p a share, valuing the group at £113.5m.

The identity of the bidder was not disclosed, but it is believed to be a management buy-out led by Wardle chief executive Brian Taylor.

The move was said to have been prompted by dissatisfaction with the company’s share price. The jump in the shares, up 93p to 412.5p on the bid announcement, arrested a long, steady fall in the share price since a profit warning in June.

In the event, full year profits, also unveiled last week, were in line with revised forecasts following the warning, which was blamed on difficulties in the group’s technical division.

The company announced a fall in pre-tax profits from £15.8m to £14.1m for the full year. Sales were also down, from £117m to £115m.

Despite the jump in Wardle’s share price, institutional shareholders are unlikely to give the bid an immediate green light. They are thought to be looking around to see if there is any interest from a trade buyer.

Analysts explained that the bid, while at a 25.5% premium to the share price before the existence of the talks was revealed, was not high enough.

`The business that has been causing the difficulties is up for sale,’ said one analyst. `I think you have to look at the company as a whole – which is sound – and the offer price does not really reflect that.’