Pumpkin Patch's attempt to hose down market enthusiasm about a potential takeover failed to have the desired effect yesterday.
Shares in the embattled children's clothing retailer traded as high as 31c, a 10.7 per cent gain on the opening price, before closing at 30.5c.
That followed a 33 per cent jump in the stock on Friday.
Almost 300,000 shares changed hands yesterday, more than five times the daily average in the 30 days up to Friday's announcement that "certain third parties" had expressed an interest in Pumpkin Patch and its board was seeking formal proposals around either an acquisition or recapitalisation.
In response to the rally, chairman Peter Schuyt released a "supplementary announcement" in which he stressed the process of seeking proposals had only just begun.
No conclusions should be drawn on whether a transaction would take place or what value any deal might offer, Schuyt added.
It is unlikely Pumpkin Patch has been surprised by the share price reaction to Friday's announcement.
Confirmation of a potential takeover will always drive big gains in a stock.
And it sounds as if the approaches the firm has received have gone further than just tyre-kicking. Stock Takes understands the interested parties are from the retail trade.
A source said there was still market speculation that Briscoe Group managing director Rod Duke - who owns 10 per cent of Pumpkin Patch and has a seat on its board - might try to take control of the company.
Duke has repeatedly declined to confirm or deny the speculation.
The source said South Africa-based retail group Pepkor - which acquired Postie Plus last year - had been rumoured to have shown an interest in Pumpkin Patch.
Schuyt said last week that the company would benefit from additional capital and expertise that could come with a new ownership structure.
Almost $200 million in shareholder value has been erased since January 2013 as Pumpkin Patch failed to gain traction in a retail market beset with margin-sapping discounting and online competition.
Through flagging the potential for a takeover, the company has made it abundantly clear that it no longer wants to go it alone.