Ideal share price shoots up as mystery suitor makes approach

Prompted by a share price rise, the AIM-listed retailer disclosed that it had received “a very preliminary approach”, but emphasised a formal offer was not guaranteed.

Ideal posted like-for-like sales growth of 28 per cent in the 17 weeks to December 30, but suffered last year as a result of the increased cost of broadcasting on Freeview.

Shore Capital analyst Andy Blain said Ideal is poised to return to “significant earnings growth” and profits this year could increase by about 40 per cent.

He said: “Ideal remains undervalued on its fundamentals, with any deal likely to secure a further take-out premium.” He shifted his stance from hold to buy.

The identity of Ideal’s potential buyer was not disclosed. However, it is understood that home shopping groups, high street retailers and private equity firms have all sized the business up in the past.

One industry source believes Ideal could be an attractive prize. “If you get the retailing right, TV shopping combined with online has fantastic potential,” he said.