Hostile bidders circle troubled Mouchel

Embattled outsourcing firm Mouchel yesterday revealed it is facing potential hostile takeover bids after financial fears have seen its shares plunge.

The group, which develops infrastructure for councils and government agencies, said it had received recent approaches, but added it believes they do not "reflect the true value of the company".

Mouchel, whose Scottish operations are based in Dundee, Edinburgh, Glasgow, Perth and Stirling, has been hit by a drop in demand after the change of UK government in May as departments have reined in spending and postponed or scaled down projects.

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Its shares have slumped in recent weeks as investors have headed for the exit amid concerns over the impact of spending cuts. Last night, they closed up 28 per cent at 72.25p.