Photobition shares fell a further 40% after the group terminated management buyout discussions and finance director Steven Smith resigned (PrintWeek, 12 October).

The group now valued at 2.9m compared with 536m a year ago has also issued its third profits warning, in a reversal of a previous statement predicting a profit before interest and amortisation.

A statement issued by the company said that discussions relating to an MBO had been terminated "as they were not progressing towards an acceptable solution".

Smith had been a member of the MBO team.

The board is now discussing the options open to the company with its existing debt providers, and expects to make an announcement in due course.

Investment group Alchemy, which had been the subject of speculation surrounding a proposed bid for the company, is reported to have walked away from talks last week (PrintWeek, 5 October).

Photobitions results are due to be released at the end of the month following completion of the companys audit, at which time the board "will elaborate on the effect on the results of reorganisation costs and closure of facilities", it said.

Photobition has confirmed that it is still working with its bankers and loan note holders with regard to its existing financial situation, after entering into an interim agreement back in August (PrintWeek, 31 August).

The company said it hoped to make an announcement in due course.

As PrintWeek went to press Photobitions shares had risen slightly and were trading at 3.5p.

Story by Andy Scott