Sion-Hampshire merger off
Article Date: Mar 06 2001Kent-based property company Sion Holdings has called off merger talks with property investment group Hampshire because of a 'lack of agreement on price', writes Robert Tyerman.
Sion and Hampshire, both quoted on Ofex, have been negotiating a potential merger since Sion first made tentative approaches in late January. It seems the talks have foundered on the issue of price. For Hampshire, which floated on the J P Jenkins market in its early days in 1995 at 21p a share, this is the second such disappointment in less than a year. In July, its shares were suspended because of tentative takeover talks.
In 1999, Hampshire turned previous losses into pre-tax profits of £146,000 on turnover of £103,000. In the first half of last year, the company made £14,000 pre-tax, though it incurred an operating loss of £1,000, and its turnover plunged by two thirds to £25,000.
Sion, which was floated in 1997 at 70p a share, similarly turned from a small loss to pre-tax profits of £98,000 in 1999 on turnover nearly 50 per cent up at £600,000. In the first half of last year, Sion's pre-tax profits almost trebled to £143,400 on turnover ahead by 63 per cent to £491,000, but operating profits fell 63 per cent to £26,000.
Sion asks its shareholders to comfort themselves with the reflection that their shares have risen 30p to 260p since the abortive talks with Hampshire were opened. Hampshire's shares have also risen from their 2001 low.
Hampshire's shares have been long term losers, though they had rallied by more than a third this year to 13.5p on hopes of a bid before today's discouraging news. The company says 'other discussions' are now in progress, which might bring some consolation.
Robert Tyerman is the editor of OffExchange, our newsletter dedicated to providing much-needed independent comment on Ofex companies. Click here for more details.
This story is from Growth Company Investor, the independent voice on fast-growing companies. Subscribe today for the latest AIM recommendations.
