Sportech share price soars after rejected takeover bid

Standard General pursues a strategy of opportunistic investments in several US middle-market companies including American Apparel and Radio Shack. The company is known for specialising in distressed debts, or companies which have either defaulted, are under bankruptcy protection, or are in financial distress and moving toward these situations in the near future. Standard General has said it may come back in for Sportech with a subsequent offer below the 28.5p per share price should the board reconsider or a third party enter into a separate takeover bid for the firm. “The board confirms that it received two approaches from Standard General about a possible cash offer for Sportech, initially at 25.0 pence and subsequently at 28.5 pence per Sportech share,” Sportech said in a statement. “The board unanimously rejected Standard General’s latest proposal, which it believes fundamentally undervalues Sportech’s businesses and prospects,” the supplier added. In a recent report on the business, London-based research firm Hardman & Co said Sportech had “not performed well over the past few years” due to previous management investments, but cited an upturn in fortunes thanks to a focus on costs and cash, which has since delivered growth. “The business has been interrupted by Covid-19, but has proved resilient, especially through online channels,” Hardman & Co analyst Jason Streets said. “There are opportunities to improve margins by transitioning from a mechanical model to a digital one. We would expect these benefits to come through over the next few years,” Streets added.