The battle for music group Sanctuary may not be over yet, with Aim-listed investment bank Crosby Capital Partners preparing a counterbid to trump Universal's 20p-a-share offer.
Crosby, which has offices in Hong Kong and London, has appointed lawyers from SJ Berwin to help launch its offer for the troubled music group, which manages James Blunt and Sir Elton John.
It will have to top the takeover offer from Universal Music Group which Sanctuary accepted last week. The price offered by Centenary, a division of Universal, values Sanctuary at £44.5m and Universal will also take on debts of £59.6m.
Although that offer was accepted, Sanctuary's board will have to consider any reasonable bid from Crosby, which is rumoured to be considering an offer at 25p a share.
"If they come in with a credible approach, the board has a fiduciary duty to take a look," said a source close to Sanctuary.
Any competition to buy Sanctuary will come as relief to shareholders after the shares have slid from £18 in June 2005 to 6.5p last November. The company, founded by two Cambridge students more than 30 years ago, has issued a string of profit warnings and last year admitted "fundamental errors" in its accounts.
Crosby focuses on businesses that are opaque or under-researched and describes itself as trying to seek out "undervalued assets that are often hidden within complex or inefficient management, ownership and capital structures." Whether it has found such opportunities at Sanctuary is unclear as it has not yet looked at the music group's books.
US music group Warner, home to Madonna, has also been watching Sanctuary. The market seems sceptical that a battle for the group will materialise with its shares closing at Universal's offer price of 20p on Friday.