Model train maker Hornby has sent Phoenix UK Fund's bid for the business off the rails this morning, after it spurned a takeover offer from its biggest shareholder.
Shares in the company fell three per cent to 32.5p in lunchtime trading after Hornby said an offer from Phoenix "significantly undervalues Hornby and its future prospects".
Last week Phoenix offered Hornby shareholders 32.375p per share, valuing the business at £27.5m.
Phoenix's move to take over the business came after it bought 17.6m Hornby shares from New Pistoia Income, taking its total holding of the toy business to 55.2 per cent.
The asset manager has made it clear it "recognises the importance of the Hornby management team and employees to the future success of Hornby", but said it won't know whether changes to the business are required until a review is conducted.
At time of writing, Hornby's share price was down three per cent at 33p.
Roger Canham, executive chairman of Hornby and chairman of Phoenix, resigned when the results were announced. Shareholders attempted to oust Canham earlier this year, calling a general meeting to decide on whether he should stay on in his position.
New Pistoia described Canham's leadership as "disastrous", and said his strategy was “ineffective, will continue to destroy value and is not aligned with creating wealth for all shareholders”.