Small Talk: Erinaceous bid talk returns as troubles mount

Woes at the property services group Erinaceous continue to pile up. It was all looking rosy for the group just a few months ago, but the foundations look shaky after a poor set of results, the chief executive stepping down and a date in court looming.

Last week, the company issued a dire interim statement with debts increasing and results slumping into the red. It even added that there were doubts it could continue as a going concern. An earlier update revealed it had breached its banking covenants after poor trading and shareholders were understandably concerned. One of the group's principal investors, Fidelity International, has more than halved its stake to 3.79 per cent in the wake of the update.

The founder and chief executive, Neil Bellis, subsequently stepped down, accepting the role of deputy chairman, with the executive chairman, Nigel Turnbull, taking over and launching a strategic review. The finance director, Michael Pearson, also the company.

The last thing the company needs is more adverse publicity, yet tomorrow it will be at the High Court as a five-day hearing starts after a writ from a disgruntled former employee. David Kahn, a senior manager with Dunlop Hayward, took the action last November over issues with a bonus payment.

One story that has dominated Erinaceous's year is the possibility of being bought. It began in April, when it started talks with the private equity group 3i, and ended in August, when HBOS, among others, walked away.

Out of the rubble of last week's statement came the re-emergence of the possibility of a takeover. Consensus Business Group, the vehicle owned by Vincent Tchenguiz, announced it was in early-stage discussions. although it added it had not made an offer. This comes as the hedge fund Fursa Alternative Strategies has built its stake to 17 per cent, leading to the inevitable speculation of a potential takeover battle ensuing.

Erinaceous can't talk after the bid approach, but it reiterated its statement that it is to focus on achieving the short-term goals in its update. With everything else going on, keeping its focus could prove tricky.

Handy Pandi

It is a rare thing that an IT company with a mere £20m of revenue last year can hold on to a blue-chip client base that includes the likes of GlaxoSmithKline, Land Securities and Morgan Stanley. Yet Pandi, an unlisted minnow in a consolidating sector, not only believes it can hold on to those lucrative clients, it also has an ambitious growth plan based on snapping up more of big clients and expanding into Eastern Europe.

The fact Pandi, which offers network-based IT services, is still independent is noteworthy in itself, with BT snapping up anything that moves in that space and a host of other players like Redstone and KCom also looking to bulk up.

Ian Summerfield, Pandi's founder, who owns 80 per cent of the shares, said he is approached about twice a month about a takeover, but has shut the door on selling out. Mr Summerfield's grand plan is to build a revenue base of £50m and list the company on AIM in 2009. The already-profitable company is on the hunt for a small acquisition of its own, and believes it can continue to grow its customer base by picking up disgruntled clients from its rivals. "Anything else would be selling ourselves short," Mr Summerfield said.

Brinkley deal doubt

More proof of the problems of doing business in the Democratic Republic of Congo. After the issues surrounding the licences of Central African Mining & Exploration, Brinkley Mining is the latest to suffer the vagaries of the country's government. Camec lost its mining licences, only to have the decision overturned and sparking a few conspiracy theories along the way. Late on Friday, the Congo government's pr firm put out a statement that seemed to throw into doubt the uranium exploration contract signed only in July. The market awaits with interest to see how this one will play out.

Horizonte on the trail of goldin Brazil

Horizonte Minerals, an AIM-listed exploration and development group, is pushing ahead with its expansion plans in South America with its latest deal in Brazil.

The group, which has a portfolio of gold, silver and base metal projects in Brazil and Peru, has a strategy to discover grassroots projects, conduct exploration and develop them through farm-out agreements with other larger mining companies.

The latest deal is a heads-of-agreement deal with Canadian Amarillo Gold Corporation to develop Horizonte's 1,000sq km Mara Rosa gold project in Brazil. Amarillo will invest $400,000 in developing the project for a 60 per cent interest and satisfy Horizonte's generation costs.

The group should be one to watch as it is reportedly looking to boost activity this year with drilling at its flagship Tangara gold project in Brazil and El Aguila silver project in Peru underway. It is on the hunt for new projects and South America is a region that is ever more coming into focus for the mining majors.