Glassmaker Pilkington yesterday rejected a second takeover bid valued at £2.08 billion from its largest shareholder.
Pilkington, which employs 500 people at an automotive glass factory in Kings Norton, Birmingham, said the 158 pence per share proposal from Japan's Nippon Sheet Glass was too low, even though it represented an improvement on the £1.97 billion approach last month.
Nippon already own 20 per cent of the company.
When rejecting the earlier bid Pilkington chairman Sir Nigel Rudd was reported to be prepared to settle for 165 pence per share - or £2.16 billion for the company.
"Pilkington has considered the revised proposal and has informed NSG that the pre-conditions are unacceptable and the price still falls short of a level which it would be prepared to recommend," the company said yesterday in a statement.
Nippon's sales and market capitalisation are about half those of Pilkington, and pre-conditions riding on the offer included successful completion of finance. The smaller firm needs to satisfy Pilkington of its plans to fund the deal.
Shares in Pilkington dropped amid fears that after being twice snubbed Nippon will walk away.
But analysts believe Nippon will come back to the table, seeking eventual cost savings from combining its European arm with the headquarters of Pilkington as they are both based in St Helens, Merseyside.
Shares in Pilkington have more than doubled over the past two years on bid speculation and an improving operating performance, underlined last month by a 22 per cent hike in first-half profits to £99 million.