Founders withdraw bid for Silentnight

The majority shareholder of the bed maker Silentnight has withdrawn a bid to take the company private and called an extraordinary general meeting to oust the chief executive and chairman of the group.

The investment trust Famco Holdings, a family-owned trust set up by the Clarke family that founded the bed manufacturer, owns 50.5 per cent of Silentnight and wants to buy out the remaining share of the business. It made an offer of 190p a share in early August, but this was rejected by the independent directors of Silentnight's board and its advisers KPMG Corporate Finance as "unacceptably low".

Famco Holdings yesterday said felt that it had "no alternative but to withdraw its indicative offer for the Silentnight shares it does not already own" after discussions with members of Silentnight's senior management broke down. It has no plans to make another offer. Shares in Silentnight closed down 14 per cent at 178.5p on the news.

Famco is now calling for an EGM to replace the current chief executive, Bill Simpson, and the chairman, Keith Ackroyd, saying it "firmly believes that these changes are necessary to attempt to preserve the value in the business for the benefit of all Silentnight shareholders". It wants to appoint two of its own directors to the board. Peter and John Clarke from the Famco trust already sit on Silentnight's board as non-executive directors.

Famco also wants to launch a share-buyback plan at a maximum price of 190p a share.

Mr Simpson yesterday said he and the three other independent directors of the Silentnight board believed the 190p offer from Famco "however it is achieved – through a bid or through a buyback plan – is an unacceptably low price and substantially undervalues the company". He said the company had co-operated fully with Famco and its advisers in the hope it would increase its offer, but to no avail.

A date for the EGM has yet to be set, but as Famco owns more than half the company, its resolutions will inevitably be passed.