MARGATE toy manufacturer Hornby has made a £5.3 million bid to buy assets of Italian model railway company Lima.

Lima, based in Vincenza and Brescia, is one of the best-known model makers in Europe. Its brands include, Rivarossi, Jouef, Arnold and Pocher.

Before liquidation last summer, Lima made all of its products in Europe. If the bid is successful, Hornby will transfer manufacturing to China where it now makes its railway and Scalextric car racing ranges.

Hornby chief executive Frank Martin said the bid would "form the platform for our expansion into key European markets and importantly increase our rate of growth in America. Our existing Hornby railway product range is largely restricted to sales in the UK.

"We have demonstrated with Hornby and Scalextric brands in the UK that the combination of a model railway brand leader and a strong international slot car racing business can produce excellent returns for shareholders. The acquisition of Lima will bring model railway brand leadership in France, Italy and a strong position in the USA and other world markets.

"We believe that the primary reason for Lima's difficulties was its inability to remain competitive, given its high-cost European manufacturing base. By transferring production to China we believe that we will be able to return the Lima brands to profitability and generate similar margins in Lima product ranges to those that we have experienced since the move."

Subject to approval of Lima's creditors and the Italian court and no other offers being accepted, Hornby is confident its offer will be accepted and will soon be able to complete the purchase of the assets.