Shares in ScS (SCS) soared over 60% in morning trading after the sofa and carpet specialist accepted a cash offer of 270p and a final dividend of 10 pence per share from Italian furniture retailer Poltronesofa.

Poltronesofa is a pan-European sofa retailer based in Italy offering ‘italian-manufactured products at affordable prices.’

Furniture industry rival DFS (DFS) rose nearly 10% to 112p on the back of the ScS bid news.

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Alan Smith non-executive chair of ScS said: ‘This cash offer, which the ScS Board unanimously recommends, comes at an attractive valuation. It recognises the quality of the ScS Group's operations, its cash resources, and the progress accomplished under Steve Carson's leadership via his refreshed strategy.’

‘The ScS board believes Poltronesofa will bring significant benefits to ScS through its broad industry expertise in addition to providing the necessary capital that would accelerate our current strategy, albeit in a private rather than public sphere.

‘The acquisition will enable ScS to continue as part of a broader, pan-European entity in pursuit of its strategy and position it for long-term success in the UK.'

ScS shares rally 5% as results meet forecasts in face of cost of living squeeze

EXPERT VIEW

‘It says something about the prospects for selling big ticket items that shareholders in sofa seller ScS are likely to welcome a premium-priced bid from an Italian rival with open arms despite the bid being pitched some way below the stock’s 2021 highs.

‘Back then a large number of people had both the capacity and willingness to shell out on new seating for their living rooms – now budgets are tighter and spending priorities have shifted, said Danni Hewson, head of financial analysis at AJ Bell.’

Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author the the article (Sabuhi Gard) and the editor of the article (Martin Gamble) own shares in AJ Bell.

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