Mouchel is target of hostile bid

Mouchel has revealed it is the target of a hostile takeover bid after a series of profit warnings and falls in its share price.

In a trading update to the City the consultant said: “The significant fall in the group’s share price over the last few weeks […] has resulted in recent approaches to the company.

“The board does not believe that these preliminary approaches reflect the true value of the company.”

Mouchel also said it was planning to sell “non-core businesses” in an attempt to reduce its debt.

It said it had net bank borrowings of £109m at the end of November and is currently in talks to refinance this debt with its lenders, which include Royal Bank of Scotland (RBS), Barclays and Lloyds.

Deloitte will carry out the review ahead of the refinancing.

The group also restated that it expects the refinancing to be complete by the time of its interim results in March 2011, and said its banks remain supportive.

At the beginning of November it recorded a £14.7m pre-tax loss and its share price dived after fears it would be heavily exposed to public sector cuts.

However despite a decline in public sector clients, Mouchel said it was seeing an increase in councils preparing to outsource services. The group also said it was on track to exceed its full-year cost savingstarget of £25m.

At the end of November, the group’s order book had been maintained at £1.8bn and our pipeline of tenders and near term opportunities had increased to £2.6bn.