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Eve confirms Simba acquisition talks have started

Eve Sleep has temporary suspended trading on the AIM stock market after confirming it is in early discussions to acquire bed and mattress retailer competitor Simba.

In a statement in response to a Sunday Times article that suggested the loss-making companies are set to combine forces in what is becoming an increasingly competitive retail market, Eve said the suspension is in accordance with AIM rules.

Trading can begin again at such time the company publishes an admission document, ends potential transaction talks, or when it is concluded that the deal is not a reverse takeover.

Eve noted that a further announcement will be made "in due course" once the business and its advisers have analysed whether the potential transaction is a reverse takeover.

Both companies have had their challenges in recent months. Last summer, Eve parted company with CEO Jas Bagniewski after the business admitted strategic mistakes and revealed sales had fallen short of expectations.

At the time, Eve acknowledged “some strategic missteps, underestimating what is required to develop a meaningful footprint across continental Europe", which resulted in the organisation reining in European expansion plans. Former Moonpig managing director James Sturrock has since assumed the CEO role and is looking to revitalise the company as a "sleep wellness brand".

Half-year results published in July showed that it had reduced its losses, but revenue dropped by 0.9% in the UK and Ireland and by 29% in France – contributing to a group underlying revenue decrease of 8% year-on-year to £12.9 million.

The value of the business is now around one seventh of the £140 million it was valued at when it listed in 2017.

Sky News reported earlier this year that Simba’s valuation was slashed to £20 million in order to secure new funding.