Cape ends takeover talk

The group, which has its British operations in Wakefield, saw its shares drop 12.5 per cent, a fall of 31p to 218p.

"Following subsequent discussions with that third party, all talks have now been terminated by the company," Cape said in a brief statement.

Shares in Cape, which provides services such as fire protection, coating and cleaning for industrial assets, have jumped as much as 31 per cent over the course of the past week following confirmation it had received a preliminary approach.

The group received another approach at the beginning of last year which did not lead to anything. Cape, which is listed on AIM, is thought to be considering a move to the main market.

The company is predicting a return to higher growth in 2011 after a year of stability in 2010.

Last month the group said it had made a solid start to the year with strong trading in the Far East offsetting a slowdown in the Middle East. Activity levels in the Far East and Pacific Rim region were "materially ahead" of 2009, offsetting lower activity in the Gulf and Middle East.

Chief executive Martin May said: "Cape has made a solid start to the year. With project cycles varying from region to region, the benefit of our scale and leading positions across our international footprint has again been evident."

He said that plant safety is of primary importance for the group's customers. "With Cape's best in industry safety programmes already recognised with several prestigious awards this year, this continues to set us apart from the competition."

Cape said adjusted profits rose 26 per cent to 60.7m in the year to December 31. Without adjustments, the group posted a pre-tax loss of 15.6m after booking a provision of 70.5m to enable it to draw a line under its asbestos liabilities.

The fact that the group has made a full provision for its asbestos liabilities has led analysts to believe the company is gearing up for a move to the main market.

The group expects levels of activity to be the same in 2010 as in 2009, but it anticipates a return to higher growth in 2011, with demand for its services benefiting from ageing infrastructure in Britain.