Homeserve Advances on Private Equity Attractions: London Mover

Homeserve Plc, the supplier of home emergency services to almost five million households in Europe and the U.S., was the best performer in the FTSE All-Share Index after Liberum Capital said the company may attract private equity buyers.

The shares rose as much as 14 percent, the most since the Walsall, England-based company published annual results on May 21. The stock was 10 percent higher at 271 pence at 12:18 p.m. in London, heading for the highest closing price in four months. The volume of shares traded was 45 percent more than the three-month daily average.

Full-year results gave some reassurance that Homeserve will deliver “stability” and perhaps growth,’’ Joe Brent, an analyst at Liberum in London, wrote in a note to clients today. The company is also “approaching an end game” with the U.K. regulator over telephone misselling, wrote Brent, who reiterated his hold rating on the stock.

“The combination of these two things makes Homeserve more attractive to a private equity buyer, who would value the relative resilience of the U.K. and the growth of overseas,” Brent wrote.

Private Equity

The Financial Times today reported there had been “theories” about potential private equity interest, without saying where it got the information.

Homeserve, under investigation by the Financial Services Authority for more than a year over inappropriate telephone selling practices, said last month it had set aside 6 million pounds ($9 million) for a possible fine and related costs. That would be less than analysts had expected, according to a note at the time by Panmure Gordon.

The shares have halved since their peak two years ago, falling 56 percent in 12 days after saying in October 2011 it was suspending telephone sales.

The company now has more than half its business outside the U.K. and expects to have more customers in the U.S. than in Britain by 2015, Chief Executive Officer Richard Harpin said in a telephone interview on May 21.

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