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A whisper has reached my ears that Bibby Factors are deep in negotiations with Davenham which could result very shortly in a take-over of the fledgling factoring operation which has struggled to get away due to Davenham’s well chronicled lack of money.
I’m not sure whether the deal will also include the trade finance division which is probably attractive from Bibby’s point of view but as there isn’t enough competition in this sector from the market’s point of view I hope that it doesn’t.
Less than a year after Davenham rejected an £84m takeover bid at £3.25 per share an announcement that record bad debts will wipe out any profits has seen the share price tumble to just 8.25p
The company has taken measures to react to changing circumstances by making a large number of staff redundant whilst employing more people in it’s arrears department but there are still concerns that the problems that originate in the property division might impact on the factoring and trade finance divisions.
Davenhams have some niche products for financing the SME sector including a stock finance facility that is quite innovative and we would hate to see that plunging property values will affect the company’s ability to continue increasing it’s presence in the factoring arena