Homestyle could be ripe for a takeover, according to analysts, following a share price leap last week. Shareholder Phillip Cort contributed to the hike when he bought more shares in the the furnishings and textiles group and upped his stake to 3.7 per cent.
Some analysts believe his buying is evidence that the group is undervalued and, therefore, susceptible to a bid. However, Cort is not regarded as a potential bidder himself. He sold his Sleepmasters business to Homestyle in 2001 in a£9.2 million cash and shares deal.
Broker Numis noted that it was 'surely significant that an insider had upped his stake in a company at a time when the market is taking such a dim view of its shares.'
Analyst Mark Hughes said: 'We think Homestyle is quite seriously undervalued and it is likely to inspire confidence that someone close to the retailer is willing to buy stock. It is certainly vulnerable to a bid.'
Homestyle has nearly 600 outlets nationwide, and trades from several fascias, including Rosebys, Harveys and Knightingales.
In its March trading statement, the retailer warned that the furniture division had suffered a difficult start to the year and a loss was predicted for the period from February to the end of April - compared with last year's pre-tax profit of£1.5 million.
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