Model toymaker Hornby has said a takeover offer from its largest shareholder, Phoenix Asset Management, "significantly undervalues" the firm.
On Wednesday, Phoenix Asset Management Partners said Phoenix UK Fund Ltd has agreed to buy 17.6 million shares - or a 20% stake - in Hornby from New Pistoia Income Ltd at 32.375 pence per share, which it will then transfer to Aurora Investment Trust PLC, another fund managed by Phoenix Asset Management.
The announcement was made as Hornby published its full-year results - confirming it would pay no dividend as it continued to execute a two-year turnaround plan. "Shareholders are strongly advised to take no action for the time being", Hornby said.
Hornby shares nudged up 0.4% to 32.5p in afternoon trading.
Canham, who has been in the post since February 2013 and is also the chairman of Phoenix, said yesterday that he had resigned from the Hornby board with immediate effect.
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Canham is also chairman of Phoenix Asset Management and earlier this year was called to step down by New Pistoia.
Phoenix has launched a mandatory bid for Hornby, after offering to buy a stake from another investor that would gave it a 55% holding in the firm.
New Pistoia had been pressurising the group to replace Mr Canham, and recently said the company's current strategy is "ineffective", "will continue to destroy value" and is "not aligned with creating wealth for all shareholders". Phoenix Asset struck a deal with smaller stakeholders Ruffer LLP and Downing LLP to vote against NPIL's proposal.
Phoenix wants Hornby to retain its listing on the junior Aim market to maintain its profile and provide access to capital.
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