Iomart down but not out after talks terminated

Angus MacSween of Iomart
Angus MacSween of Iomart
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CLOUD computing firm Iomart yesterday responded to news that rival Host Europe had walked away from takeover talks by issuing an upbeat trading update.

Shares in the Glasgow business fell sharply today morning when trading began for the first time since Host Europe’s announcement after the market closed on Monday, although they later recovered some of the lost ground to close at 226.5p, down 36.25p, or 13.8 per cent.

Host Europe, controlled by private equity firm Cinven, had been mulling a 300p-a-share bid. No reason was given for its decision to terminate talks.

In a statement today Iomart noted Host Europe’s announcement but did not comment further. It also issued a trading update which said first-half sales and profits should be “substantially” ahead of last year.

Iomart’s chief executive Angus MacSween said: “Demand for the group’s services remains strong and growing as the market continues to move towards the provision of products and services over the internet. These strong market drivers leave the board confident in the outlook for the full year.”

Analysts at FinnCap said although they were disappointed and surprised by Host Europe’s announcement, they remained optimistic about Iomart’s prospects.