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Arab firm develops an interest in Photo-Me
The flurry of Middle Eastern interest in British companies is set to continue after Photo-Me International, the quoted operator of thousands of passport photo booths, received a preliminary approach from a Bahraini investment firm.
Surrey-based Photo-Me is understood to have been contacted several weeks ago by Arcapita about a full takeover or the acquisition of a strategic stake in the company.
JP Morgan Cazenove, Photo-Me's adviser and corporate broker, was asked to oversee the discussions and to sound out interest from private-equity firms about a takeover of the group. It was not clear last night whether these discussions have now ended.
"We do not comment on market speculation," said a Photo-Me spokesman.
Arcapita, which also has offices in London and Atlanta, was unavailable for comment.
P&O, the ports and ferries operator, Tussauds Group, owner of the Madame Tussauds waxworks, and Doncasters, the engineering firm, are among the British companies to have been acquired by Middle Eastern investors in the past 18 months.
A takeover of Photo-Me, in which the activist shareholder Steel Partners owns a 4% stake, would mark the end of a rollercoaster period for the company.
Photo-Me traces its roots back to 1946 and became a public company in 1962. In recent months the firm, led by chief executive Vernon Sankey, has found trading in its core business increasingly tough.
In January, Sankey announced falls in revenue, operating profit and margins and warned on profits for the remainder of the financial year. The warning was largely the result of worse-than-expected trading at Photo-Me's manufacturing division.
To reduce its reliance on its core business, Photo-Me has acquired a 60% stake in Deith, one of Britain's biggest developers of arcade machines.
Photo-Me operates in 15 countries, with Britain, France and Japan its largest markets
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