Shares in Erinaceous were in freefall this week after it became the latest victim of the turmoil in the global credit markets when it announced that it was no longer in talks with any party over a sale or management buyout of the company.

The property services group said on Wednesday: “Management explored the options with a number of interested parties but have concluded, particularly in light of recent global credit markets, that the interests of the shareholders and the company are best served by terminating the discussions.”

It emerged at the weekend that HBOS had pulled the plug on a proposed £300m takeover bid, partly because the global credit crunch has made it harder for the bank to find sufficient cheap debt to fund the deal.

But Erinaceous was still thought to be in talks with other interested parties, which is now no longer the case.

Shares in the company had fallen 22% to 123.25p on Tuesday, after it emerged that HBOS had withdrawn its indicative offer. They fell a further 8% to 113.75p on Wednesday after it said it was no longer holding talks.

The interests of the company are best served by terminating
the discussions

Erinaceous statement

It first announced in April that it had received takeover approaches. However, Bridgepoint, 3i and Consensus Business Group all pulled out soon after.

It will come as a big blow to the Erinaceous team Neil Bellis, chief executive, and Lucy Cummings, chief operating officer, who control about 20% of the firm’s shares and were keen to for a management buyout.

Better fortune has struck social housing firm Keepmoat however, as HBOS has proceeded in backing a £783m management buyout of the company. Keepmoat has a turnover of £535m and a £3bn order book.

In a separate development, HBOS announced last week that it did not intend to make an offer for developer Quintain. Quill Securities, an HBOS subsidiary, had previously announced that it was “considering its options”.