Shares in Hornby are climbing this morning after Phoenix Asset Management acquired a majority stake in lossmaking toymaker and made an offer worth £12.3m for the rest of the company.
Phoenix said it had agreed to buy 20.9 per cent of Hornby, which makes Airfix planes and Scalextric cars, from New Pistoia Income Limited – taking its total holding to 55.2 per cent.
The remaining shareholders would be offered 32.38p in cash per Hornby share, said Phoenix. This compares with a closing share price on Tuesday for Hornby of 32.5p. On Wednesday, shares rose 11 per cent to 34.8p.
Regarding Hornby management, Phoenix said it:
Recognises the importance of the Hornby management team and employees to the future success of Hornby.
As the review of Hornby’s business has not yet been completed, no decisions have been made by PAMP on its long-term intentions for Hornby. Until such review is completed, [Phoenix] cannot be certain whether any changes will be necessary.
In its full-year results announced today, Hornby revealed a 15 per cent fall in revenues to £47.4m but shrunk its pre-tax losses to £9.5m – a drop of 30 per cent.
Chief executive Steve Cooke said:
Much remains to be done to return the business to sustainable profit and positive cash generation but we are confident that the changes delivered last year will underpin the progress we plan to make.