The Board of Speedy Hire Is Pleased To Announce its Preliminary Results For The Year Ended 31st March 2007. Mandatory credit: VisMedia +44 (0)20 7613 2555

Tool rental group Speedy Hire has denied that it is considering a tie-up with rival HSS following merger speculation after both groups endured a turbulent year.

The London-listed companies have each seen their share prices plunge after a series of profit warnings, senior management changes and underwhelming trading.

But Speedy intervened on Thursday after press reports said that the two companies had been in preliminary talks about a combination until last month.

Sky News reported that a deal was understood to have had the backing of a number of the largest shareholders in both groups. However, it said that the proposal had encountered boardroom disagreement at Speedy, leading to the departure of two non-executive directors.

Speedy said in a statement: “Following recent press comment, Speedy confirms that it is not considering a combination with HSS.”

Both companies have replaced their chief executives in the past six months. Any merger would bring a degree of consolidation to a relatively fragmented sector.

Adrian Kearsey, analyst at Panmure Gordon, said: “There’s an awful lot of local independents supplying a large proportion of the UK [equipment rental] market. The US experience shows increased concentration and that’s driven margins.”

Shares in HSS jumped 8.7 per cent to end the day at 56.5p. It was floated at 210p in February by Exponent Private Equity, which is still its majority shareholder.

Speedy’s shares closed up 1.4 per cent at 35.25p. Both stocks are down more than 50 per cent this year.

HSS and Speedy both declined to comment.

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