Touchstar Takeover Rumours (TST)

I think we shouldn't underestimate the fact that the leadership of the company has announced that they intend to leave(Ian at least, and I can't see the CEO hanging around for much longer)(which is a big deal for any company, let alone a small one). The original plan was to find a replacement for Ian, which probably they couldn't find hence the plan B of a sale. The reality is that such process introduces a lot of uncertainty both for employees(who know what is coming if a takeover) and customers alike. While I was quite positive on the story pre the going up for sale news, I am no longer as positive if a bid doesn't materialise(which is bad) and the management leaves(which was already announced with no successor in sight). So there could potentially be substantial volatility in the near term.

Got wind of a takeover bid perhaps - or thinks he has. Company did say they're open to bids. If it's a purely speculative stake on just the possibility of a bid it is a lot to risk. He does some fast trades - so could sell within days if his move triggers a surge.

Interesting and encouraging that TST have "been approached by various parties about possible mergers, alliances or sale of all or parts of the business" over time. IMO given forecasts of 11.5p EPS for the year starting in only 3 months' time, plus a likely £3m+ cash pile (say 40p per share), a takeover might bring anything from 160p-220p per share. The H1 results are actually ahead of expectations according to management, with a heavy H2 weighting this year. Note that TST say the final outturn is "broadly on track" suggesting perhaps a slight miss on the 10p EPS forecast. But this is immaterial given the progress against 7.6p EPS last year. Note too that the £1.74m cash pile is well down, only due to the £1.2m of additional debors and inventory at June 30th which will reverse in H2. The 50% rise in the dividend is indicative of the confidence going forward. Perhaps now is the time for more buybacks.