Buried away in a stock exchange announcement headed "Update on Return of Capital" came news that music business Chrysalis is in takeover talks.
After giving details about its plans to return £96.5m to shareholders following the sale of its radio business, Chrysalis said: "The board is in discussions with a number of parties regarding potential acquisitions. It is also in preliminary discussions with select parties which may or may not lead to an offer being made for the entire issued share capital of Chrysalis."
Analyst Simon Davies at ABN Amro said: "We think the break-up value is at least 127p, but given the wide range of trade multiples for music publishing, it could be over 140p.
"However, it is an oddly worded statement which also raises the spectre of Chrysalis becoming the acquiree instead - an altogether less enticing prospect. The timing of a bid approach is not ideal (with EMI in disarray and private equity funding costs spiking upwards), and there is scope for a conflict between the price expectations of Chris Wright, the executive chairman, who owns 26%, and those of his institutional
shareholders. Nonetheless, this is positive news which should narrow the discount to its break-up value."
The news, hidden away as it was, has lifted Chrysalis shares by 5.5p to 112p.
