Investor's move to take fibre group private

Mr Gyllenhammar bought out its second biggest shareholder, Hanover Investments, to give him 54.6 per cent of the Bradford-based manufacturer.

He is offering shareholders 25p a share for the rest of the company, valuing Chapelthorpe at just 5.1m. The 4.2 per cent premium to Tuesday's closing price was labelled "miserly" by one analyst.

"We believe that being a public company is more of a liability than an asset to Chapelthorpe," said Mr Gyllenhammar in a statement.

His investment firm, Bronsstadet, paid 1.3m for Hanover's 24.8 per cent stake. Acquiring 75 per cent of Chapelthorpe would allow the activist Swedish investor to take it private. Mr Gyllenhammar's takeover bid had an air of inevitability after he upped his stake to just below 30 per cent in April last year.

"Although the performance of Chapelthorpe has improved from an unsatisfactory level, the share price performance has not... reflected this performance," said Bronsstadet.

Mr Gyllenhammar could not be contacted for comment yesterday. Bronsstadet said it values the company's staff but will appoint more directors to the group's board and may make other board changes.

Chapelthorpe, which makes fibres used in cars and carpets, recently returned to profit for the first time in six years and had been planning expansion into fast-growing markets such as India and South America.

Chairman Leslie Goodman said the takeover approach for the 88m turnover company "was a bit out of the blue" and Hanover had not spoken to him about selling up.

"There's nothing really for us to do about it because the shares have been acquired," he said.

"We will be putting out some advice in due course. But it will be set against the background where the control of the company has passed into Peter Gyllenhammar's hands.

"My interest is to, as far as I can, make sure that management and staff are briefed and feel this can be positive for them and to make sure there's a smooth transition."

Hanover partner and Chapel-thorpe non-executive director Tom Russell said: "We got to a situation where we were kind of stuck. It's a rather unusual situation where you get two different shareholders who have individual but substantial stakes.

"You end up in a situation where you cannot get out of the company because it creates an overhang in the market and moves the price down.

"We reached the conclusion that we didn't want to be stuck there any more. It's a good business but it's not really our business model to be a passive investor in a stock."

WH Ireland analyst Eric Burns said: "The premium proposed is miserly. However, it's symptomatic of the low end of AIM where there's not a lot of interest and companies are open to opportunistic bids such as this.

"I would expect that by and large people will probably accept it because it offers them a way out."