Innovation surges after confirming advanced takeover talks with Carlyle

Shares in Innovation Group surged after the London-listed software provider responded to press speculation by confirming that it is in advanced talks about a 40p-a-share takeover by US buyout firm Carlyle.

Innovation said: “A further announcement may be made shortly and will be made as appropriate. However, there can be no certainty that an offer will be made, nor as to the terms on which any offer will be made.”

Earlier, Sky News reported that discussions between the two have been ongoing for several weeks.

Sky said the deal was expected to be backed by a number of Innovation's largest shareholders, including Henderson Global Investors.

Innovation provides motor and property claims process services, enabled by specialist software technology that it also sells on a standalone basis.

Sky said a takeover would cap a significant turnaround for investors who have stuck with the company since it was valued at around £50m just over six years ago.

It added that Carlyle's interest in Innovation is understood to have been sparked by its ownership of roadside recovery service the RAC, where telematics are playing an increasingly important role in the motor insurance industry.

Investec is understood to be advising Innovation on the talks, while Carlyle is reportedly working with bankers at HSBC.

At 1134 BST, Innovation shares were up 7.8% at 38.00p.