Monday, 24 August 2009

MBO for FDM increasingly likely

(By Philip Carnelley, 24 Aug 2009, 09:00) We reported back in June (Management bids for FDM) that FDM’s management team was looking at a buyout of FDM shares, backed by Inflexion Private Equity, at a price of 120p – a premium of roughly 20-25%. FDM reported this morning that the price being mooted has now risen to 135p, and that formal due diligence will begin. It seems that the MBO team and their backers have faith in the future vision for the company being promoted by CEO Rod Flavell, though we have our doubts (see FDM – a dream too far?). At the least, it indicates that they're prepared to take a punt, given that this is a profitable, cash generating company with money in the bank. But many's the company which has abandoned its 'knitting' to embark on a new grand vision, and subsequently come a cropper. We trust FDM won't make this mistake. Of course, no formal offer has yet been made, but surely due diligence won’t show up anything the CEO and his team don’t already know.

No comments:

Post a Comment