Henlys said this week it would not raise its original offer for specialist vehicle manufacturer Dennis, despite rival bidder Mayflower increasing its offer to 475p a share, equivalent to £268.9m.
Henlys originally tabled a 545p a share cash and shares bid but recent stock market falls mean it is now worth only slightly more than Mayflower’s first offer.
Since 14 August when it made the offer, Henlys share price has dropped from 565p to just 425p.
Mayflower’s revised offer is worth almost 5% more than Henlys’.
Henlys said it would not increase its bid as it felt its offer fully valued Dennis, especially taking into account the medium term prospects for Far Eastern bus markets.
Mayflower’s new offer came a day after the Takeover Panel stopped the clock on the timetable for the deal until a decision is made as to whether the rival bids will be referred to the Monopolies and Mergers Commission.
Mayflower disclosed that it had acquired or had acceptances for 29.9% of Dennis shares.
Analysts said Mayflower’s progress appears to give it the upper hand. However, in a statement to the Stock Exchange, Henlys insisted that its own bid remained the best deal for Dennis in strategic terms.
Dennis has previously indicated a preference for Henlys, claiming strategic factors that outweigh the advantages of an alternative deal with Mayflower.
Analysts, however, point out that Henlys will still have to have a better financial deal on the table if it is to convince shareholders.