Hartest Holdings drops 20% after Delta Controls talks end without formal offer

Hartest Holdings (AIM: HTH) shares fell 20%, as the board confirmed that its 8-month-long offer talks with privately-owned Delta Controls Ltd have been terminated. Delta’s indicative offer price reached up to 68.33p per share and the Hartest board said it felt that the price represented reasonable value, however from the outset Hartest's largest shareholder, Peter Gyllenhammar, with 29.95% stake, has clearly expressed that he was not willing to accept the proposal.

On London’s AIM market Hartest fell 13p from the 62p close on Friday 19 February, shares were last changing hands at 49p per share.

"Naturally, we regret that the effort and cost we expended with various interested parties since the commencement of the offer period in July 2009 has not resulted in the presentation of a cash offer to shareholders which might have provided an opportunity for them to realise value in a currently illiquid market”,  Hartest Chairman and CEO Geoff Spink stated.

According to Hartest, its major shareholder Gyllenhammar, through his wholly-owned vehicle the Bronsstadet Group, did not believe that Delta’s offer reflected the company's true value. Despite their disappointment, Hartest said the termination draws a conclusion over a period in which the company has endured the effects of bid speculation, and they are pleased that their attention can now be focused solely on the operations of the business.

“It should be noted that the approaches were all unsolicited, and in spite of the inconvenience created by the offer period, the group continues to enjoy good and improving profitability and growth, supported by strong cash flow”.

Hartest also provided investors with a trading update, in which the company said it has continued to trade very profitably, and it has been supported by strong cash flow. The company said that it typically experiences a significant bias in trading and performance levels in the second half, and it anticipates that weighting will repeat itself in the current period to 31st March 2010. “We look forward to generating increasing shareholder value going forward.  Shareholders will also note that the Board was able to resume dividend payments at the time of the recent interim announcement", Spink concluded.  http://www.proactiveinvestors.co.uk/companies/news/13590/hartest-holdings-drops-20-after-delta-controls-talks-end-without-formal-offer-13590.html