Silverjet reveals bid talks, shares take off

By John Bowker and Hsu Chuang Khoo

LONDON (Reuters) - Beleaguered British business airline Silverjet SILJ.L said on Thursday it was in takeover talks with unnamed suitors, propelling its shares 36 percent to a two-month high.

The loss-making company, which operates flights to New York and Dubai from London and owns three aircraft, declined to comment on the identity of the potential buyers.

Its shares surged to 20.75 pence at 1249 GMT -- valuing the carrier at about 13 million pounds ($25.71 million) -- a tenth of their March 2007 peak, when they as high as 207 pence.

Silverjet declined to say whether the talks were crucial to the survival of the company, which last raised cash in November.

But Daniel Stewart analyst Mike Stoddart, who caused the shares to crash in January when saying Silverjet would run out of money due to rising fuel costs, said the talks were vital.

"The company does need fresh equity. Without fresh equity it hasn't got a future," he told Reuters. "We are not a fan of the business model and we think that without major changes the company will run out of equity funds soon."

Silverjet raised 21 million pounds in November, including a 10 million pound loan from property tycoons the Reuben Brothers. A source familiar with the matter said the duo were not one of the parties behind the talks.

A spokesperson for the company declined to comment on how much of the 21 million pounds was left, adding that a pre-close trading statement was due later this month.