Good evening/morning.

Apologies for Friday's report being late, I was in bed with a cold. Also, there was nothing of any interest in the small caps world for results or trading updates. However, I've reviewed a few things belatedly, including the insolvency of Interserve - something that Graham and I have warned about, repeatedly, for a long time - so I'd be very surprised if any of our readers lost money on that one.

Friday's report is now finished, which is here.



Footasylum (LON:FOOT)

Share price: 81p (up 74% today, at market close)
No. shares: 104.5m
Market cap: £84.6m

Recommended cash offer

Exciting news today for shareholders in this sports footwear chain, targeting yoof, which has been a dismal performer since floating in Nov 2017. Much bigger rival, JD Sports Fashion (LON:JD.) has launched a recommended cash takeover bid at 82.5p per share. This is a very generous offer, in my opinion, given the poor outlook for FootAsylum.

Based on the large shareholding which JD already has, plus indications of support mentioned in today's announcement, then this looks a done deal - unless the competition authorities get involved in some way, in trying to block, or amend the deal. For that reason, I would sell now, banking the excellent profit, rather than risk something going wrong (scarred by my failure to bank profits at Revolution Bars (LON:RBG) after the 203p cash bid there fell through some time ago).

My opinion - this is great news for the bombed-out UK small caps market. I was having a drink in the city recently, with my main stockbroker, and another small caps specialist, and we all agreed that what this market needs right now are one or two takeover deals, at a big premium. Well here we are, that's exactly what this FOOT deal is.

I think this nicely demonstrates that (selectively, as always) there is considerable value out there in small caps. Many shares have ground down, for up to a year now, often for no particular reason. Things have not risen on good results, and have often sold off, even on OK results. Disappointments, even mild ones, have been punished heavily, and repeatedly sometimes.

All of which combines to give…

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