Just May-be: The first steps towards recovery?

May has marked the busiest month for the UK buyout market this year, with unquote" clocking three buyouts in the week of 11-18 May alone. What constituted a piddly sum in years past could now be perceived as the onset of a gentle recovery in an otherwise grim market (see Corporate finance feature, page 10).

Just last week it was reported that Gresham is backing the £25m take-private of AIM-listed sports and talent-management agency Formation Group, which represents the likes of Simon Cowell, Ant and Dec and footballers including Manchester United's John O'Shea.

Shareholders are expected to be offered approximately 11 pence per share, an 80% premium to 22 May's closing price of 6.5 pence. If investors okay the deal, the transaction could be completed by June.

It is reported that Gresham is looking to buy five of the company's seven subsidiaries, including talent management businesses James Grant and Proactive Sports Management. The construction and asset management arms of the company will not be included in the deal.

Founded in 1987, Cheshire-based Formation's market value has declined more than 70% in the last year. Last November, it lost £11.6m when Icelandic bank Landsbanki collapsed after agreeing to provide the company with £93m in financing for a construction project.

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