Following last week’s confirmation by Spring Group that it had received a proposal regarding a potential cash offer for the company, mergers and acquisitions intelligence service Mergermarket reported that ET Training, Spring Group’s largest shareholder, with a 35.9% stake, was amongst the parties rumoured to be behind the move.

As Recruiter went to press, ET Training had not responded to Recruiter’s calls. However, the Financial Times, reported that people familiar with ET Training had downplayed the speculation. Peter Searle, Spring Group’s chief executive told Recruiter: “Things are in the air, but at this stage I can’t tell you anything.”

There was also speculation that a management buy out (MBO) led by Searle could be behind the developments. The suggestion is that an MBO would be a good way of way of incentivising Spring’s executives, who been unable to benefit financially as the company’s share price has marked time.

However, Searle firmly scotched this suggestion. “We wouldn’t do a whole deal just to incentivise a few individuals,” he said.

Tim Evans, a director of Catalyst Corporate Finance, told Recruiter: “The Spring offer is only a proposal for now and does not constitute an offer. At any one time, there are many proposals being discussed and negotiated in the M&A market that come to nothing.

“A valuation of £85m is a high valuation for the earnings of Spring, but a review of its balance sheet shows that it is cash rich. Therefore the real value and earnings multiple assigned to Spring by this proposal is significantly lower than it may first appear to be. This makes talk of an offer for Spring less surprising in the current M&A market.”

As Recruiter went to press Spring’ s share price stood at 53.25p, a 12-month high.