Plant hire group Ashtead has abandoned its plan to purchase the UK business of rival Lavendon.
Ashtead had made a joint approach for the firm with Belgian plant hire company TVH offering 115 pence per share on 12 January.
The pair made it clear in their initial bid that there would be no higher offer unless they came across significant additional value during due diligence.
But a firm rejection from Lavendon of an “opportunistic” offer which “significantly undervalues” the company also included a confirmation that the firm was trading in line with expectations – effectively closing down any prospect of finding any additional value.
Michael Parkinson an analyst at Brewin Dolphin said the offer had undervalued the firm. But despite seeing off the approach from Ashtead, the Lavendon board should not rule out a larger offer from another rival or private equity house.
He said: “This is a cash generative business in a recovery situation and private equity firms that we talk to are looking at companies like that.”