Giles is considering a £5m offer to buy listed-Manchester broker CBG.
The consolidator confirmed discussions over a 32 pence per share offer, valuing the company at around £5m - a 54.2% premium on the 21p share price at close of business on July 19.
CBG confimed yesterday it received an approach from Giles, as exclusively revealed by insurancetimes.co.uk last week.
There has been speculation, albeit unlikely, that Giles could use CBG in a reverse takeover to float on the stock exchange.
However, it is more likely that CBG will delist from the stock exchange and be rolled into Giles if the offer is accepted.
Talk of a takeover has caused CBG's share price to rocket today 39% to 29p.
CBG Group's revenue fell from £8,961,000 in 2009 to £7,708,000 last year. Adjusted earnings before income tax and depreciation was £1.16m last year compared to £1.386m in 2009.
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