A Guernsey-based investment group has had to make a takeover bid for IT recruiter Lorien, but seems to want the bid to fail.

Southwind Limited, controlled by Bob Morton, has been building up its stake in Lorien. Southwind recently acquired an additional sizeable block of shares, taking its stake to 40.3%. Under the City Takeover Code, any party which acquires more than 30% of a listed company has to make a full bid for the remainder.

Southwind paid 40p each for the shares it acquired recently and the bid will be at that level. This values Lorien as a whole at £7.45m.

Southwind said it will only make the offer to other shareholders "because it is mandatory to do so under the City Code". This suggests that it does not want the bid to succeed, and is unlikely to raise the value of its offer.

With Lorien's share price now above 40p, any investor who wanted to sell might do better to go through the stock market, rather than accepting Southwind's offer. Lorien advised shareholders not to take any action.

Christopher Hinton, finance director at Lorien, told Recruiter: "Bob Morton tends to invest in quoted companies, rather than take them private."

In a typical hostile bid, the acquirer would issue a statement saying why shareholders should accept the offer. Hinton said he did not expect this to happen.

Southwind also owns 58% of medical recruiter Multi Group. Multi considered making an offer for Lorien in 2005, but did not proceed. Lorien has 400 staff, at London, Leeds, Manchester, Lichfield, Heathrow and Edinburgh. Its turnover for the year to 27 November 2005 was £129.1m.