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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Shares in specialist IT recruitment group InterQuest (ITQ) have jumped by a net 8% in the past two days to 116.5p on the back of an announcement that “it is launching a review of options open to the company to maximise value for shareholders including a potential sale of the company”. Ching Ching.
This includes it “to initiate discussions relating to a sale of the company under the framework of a ‘formal sale process’, under which the board of InterQuest is able to have discussions with third parties interested in such a transaction on a confidential basis”
This should come as little surprise to those that have followed our Nifty Fifty share tip at an 88p offer eleven months ago as we noted then “potential upside in founder and chairman Gary Ashworth seeking to realise value via a sale of the company”. The company is interestingly now being advised by US-based CHILDS Advisory Partners as well as house broker Charles Stanley Securities.
It is emphasised that “there can be no certainty that an offer will be made” but the company notes its “focus on specialist niche recruitment services providing some of the market's most in-demand skill sets”. The noted share price rise also only returns the shares to around the levels of post the positive interim results last month – at which we concluded that a further modest re-rating looked merited at worst and a takeover at 150p+ within months at best. As such, we are currently content to see how this plays out and happy that we backed proven value creator Gary Ashworth.
116.5p is justified on fundamentals alone. The upside from a trade sale is c34p. On a risk reward play you could do a lot worse.
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