BANGALORE Rental-equipment firm Lavendon Group (LVD.L) rejected a 189 million pound joint bid from Belgium's TVH Services and UK's Ashtead (AHT.L), saying the sweetened offer still undervalued it.
Ashtead and TVH had offered to buy Lavendon for 115 pence a share, a slight discount to Lavendon's Wednesday close, but a premium of more than 45 percent since TVH made its 111 pence a share offer public in early December.
Lavendon, which rents out powered aerial work platforms that enable people to work safely at heights, had in December rebuffed TVH's earlier bid, saying the 183 million pounds offer undervalued the company.
Evolution Securities analyst Philip Sparks called the latest bid fair, and cut his share-price target on Lavendon by 5 pence to 115 pence.
"It will be interesting to see if this flushes out any interest from private equity," Sparks said.
"Lavendon has a relatively young fleet compared to many of its competitors, thus it could slash its capex for a few years and generate huge amounts of cash."
However, Spark said if private-equity firms did not make a counter bid, Lavendon's management "will have to make a very strong case for remaining independent."
Lavendon Group, which derives bulk of its revenue from the construction market, had a torrid year as profits fell, forcing the company to slash dividend.
Earlier in the day, TVH and Ashtead ruled out raising their offer unless due diligence revealed a material improvement in Lavendon's financial position and prospects versus current market expectations.
Ashtead and TVH had planned to split the payments in the proportion 47.5 percent to 52.5 percent.
Lavendon shares were down 4.3 percent at 110.25 pence at 2:35 p.m. British time on Thursday on the London Stock Exchange. Ashtead was down 2.5 percent at 165.7 pence.
(Reporting by Adveith Nair in Bangalore; Editing by Vinu Pilakkott)
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