Herefordshire garden chain Wyevale could be on the brink of a new owner after its largest investor halved its stake.
Laxey Partners, which forced the removal of chairman David Williams following two EGMS last year, sold 14.9 per cent of its 28.7 per cent holding yesterday.
The sale, at 555p a share, to venture capital firm West Coast Capital, netted Laxey £46 million.
West Coast, led by Sir Tom Hunter, is understood to have reached agreement to buy Laxey's outstanding 13.8 per cent stake at the same price.
Sir Tom, is expected to try to buy US investor Millennium Partners' 11.3 per cent stake as part of a formal offer for the company.
Seymour Pierce analyst Richard Ratner said: "It would be a pity because we think there's huge potential in that business to double profits over the next four to five years but if 40 per cent of your shareholders want out, then I suspect that's what may happen."
Laxey, an investment manager which specialises in buying out-of-favour stocks with recovery potential, first invested in Wyevale in 2004.
Since then, it has been involved in rows with Wyevale's board and management, which sought and failed to find a buyer last summer.
Mr Williams was ousted at an EGM last December and was replaced by property specialist Jim Hodkinson.
Colin Kingsnorth, director of Laxey, said: "In any action which we initiate our aim is to ensure that the company fulfils its potential, which will lead to an increase in the share price. This is to the benefit of all shareholders." Shares closed up 35p at 550p.