Two of Britain's best-loved toy makers are set to merge with key protagonists from both firms in the final throes of thrashing out a deal.
Hornby, the firm known for its model railways, Airfix and Scaletrix brands, is to join forces with Oxford Diecast.
Talks were formally revealed as Hornby appointed the founder of Diecast, Lyndon Davies, as its new chief executive.
"Hornby is exploring the opportunity to invest in [Oxford Diecast parent company] LCD. Further information will be released in due course," Hornby said in a short statement this morning.
Shares in Hornby jumped over four per cent in the wake of the announcement.
Sources said Hornby and Diecast were close to completing a merger that that would lead to combined revenues of more than £50m.
Diecast has recently ventured into model railways, investing spare cash to expand its range, which is traditionally associated with model cars and trucks.
Davies replaces Steve Cooke with immediate effect and will be supported by a duo of specialist consultants: Tim Mulhall and Simon Kohler.
The executive and strategic changes follow a review by Phoenix Asset Management, which took control of Hornby earlier this year.
Hornby is working through a financial and operational turnaround strategy. It is understood that while shareholders were impressed by Cooke's role in shoring up Hornby's balance sheet; they were keen to draft in someone with greater operational experience in the model sector.
Interim chairman David Adams said: "I am delighted to welcome Lyndon to the board. His obvious expertise in and enthusiasm for the toy and hobby industry will provide the group with experienced leadership for the next stage of our development. Hornby will continue with its turnaround plan and Lyndon is ideally qualified to steer the group through this period."
I would like to take this opportunity to thank Steve for his service to Hornby and for his leadership of the first stage of the turnaround plan. On behalf of the board, I wish him every success in the future.