Web hosting firm Iomart rejects two takeover approaches

Iomart currently has eight data storage centres in various part of the UK

Shares in web hosting specialist Iomart rose sharply in early trading after the company confirmed it had rejected two takeover approaches.

Iomart said it had received possible cash offers on 13 June and 27 June of 275p and 285p per Iomart share, respectively.

The offers were made by Host Europe Holdings.

The Glasgow-based firm said its independent directors concluded that both offers undervalued the company.

Host is controlled by funds managed by Cinven Capital Management (V) General Partner Ltd.

In a statement, Host confirmed that it had approached the web hosting firm regarding a possible cash offer of 285p per share.

Host has until 21 August to announce a firm intention to make an offer for Iomart, or walk away.

By 12:40 on Thursday, Iomart's share price was up 10.53% to 259.75.

It currently has eight data storage centres in the UK, including Glasgow, London, Manchester and Nottingham.

In May, Iomart reported a surge in revenues and profits, driven by organic growth and the impact of acquisitions.

It saw revenues climb by 29% to £55.6m in the year to the end of March, with its hosting business growing by 40% to £44.7m.

Adjusted pre-tax profit rose by 37% to £14.6m.