Urbium shares leap in wake of Electra's offer

by The PMA Team

Tiger Tiger operator Urbium has received an indicative offer of more than £10 per share from private-equity firm Electra Partners. News of the offer led some analysts to claim that former Urbium bidder Regent Inns was now more likely to become a takeover target itself.

Urbium has now chosen Electra as its 'preferred party bidder Electra is carrying out due diligence prior to making a firm offer. One source has claimed the all-cash Electra offer could be as high as £10.75 a share, which would value Urbium at around £114m.

On Monday morning, Urbium's shares soared by 11.3% to £10.05p on the back of the fresh news on bid interest. Urbium was put into play after receiving a series of offers from Walkabout operator Regent Inns, ending in an bid worth 975p a share.

The indicative bid from Electra represents a sizeable premium on Urbium's share value earlier this year, which dipped below 500p. Interest from Regent prompted the shares to soar to above the 900p mark.

When Regent withdrew from the auction, Urbium's shares fell by 4.7% to 897.5p. Electra previously owned Tom Cobleigh, which was sold to Spirit Group.

Electra also sought to provide the finance for the secondary buy-out of Barracuda but lost out to Charterhouse.

Analyst Greg Feehely, of Altium Securities, said: 'The rationale for Regent's bid for Urbium was clear to all. But the failure to acquire Urbium will increase the likelihood that the company is now more prey than predator.

'Regent could be taken out for in the region of 100p a share, comfortably north of its closing price of 81p last Friday.

A second analyst, who asked to not be named, told the MA that he believed the take-out price for Regent could be more in the region of 110p to 120p. He said: 'Regent Inns is currently trading its socks off. It is going to trash consensus profit forecasts for the current year.