The good news for the Group was short lived after discussions did not progress to the satisfaction of the Board.
Companies: Quarto Group, Inc.
Almost a quarter of publishing group Quarto's (LON: QRT) share price has been wiped off after talks with an unknown bidder haven fallen through, it was announced today.
The unnamed bidder made an unsolicited approach less than a fortnight ago, allowing the Group's share price to avoid plunging with the announcement of its poor H1 17 results released the same day.
The Board said the initial approach warranted merit as it was "considered attractive and reflective of the inherent value of the business". They went on to say in this mornings announcement that:
"Unfortunately, these discussions were not progressing to the satisfaction of the Board. It became clear that the regulatory approvals required by the bidder to complete the proposed acquisition were increasingly less likely to be granted on the timeline first indicated".
Commenting on the decision by the Board, Group CEO Marcus Leaver said:
"This was an unsolicited offer and while it was pitched at an attractive premium, the Board considers it imperative that the Company remains focused on delivering a strong finish to the year. I welcome the clarity which this decision brings."
Quarto's interim results released on August 8 reflected the poor trading numbers in July, highlighted by continuing retail softness in the UK & US and changing market trends. Revenues fell 13% to $50.2m and it reported an adjusted loss before tax of $8.7m (loss $1.6m). Net debt rose also 5% to $75.8m.
The Group is clearly in a period of transition, after operating at a loss in 2016 (-$5.7m) , and general consensus showing an expected net profit of $8.3m for 2017. Quarto didn't issue an interim dividend off the back of its low H1 17 numbers, with consensus showing EPS growth for 2017 to be -10%, but shooting up to +100% in 2018.