Henderson immediately responded that it would press on with its own sell- off bid for Kepit, which it launched on Wednesday via TR European Growth investment trust.
Kepit's shares rose 1.75p to 92.75p, their highest level for a month but 10.4 per cent below their net asset value of 103.8p.
Kepit was launched two years ago to invest in previously state-owned assets. In June, Kleinwort in effect admitted that the trust was too large and had suffered from a lack of suitable investments. It was trading at a discount to net assets. Kleinwort proposed to liquidate 60 per cent of the fund.
On Thursday, Kepit's board rejected the takeover approach from TR. Yesterday Ben Siddons, chairman of Kleinwort Benson Investment Trusts, said: "We believe that the Kleinwort proposals will cost less and be more orderly than the proposals from TR."
Kleinwort estimates it would cost TR pounds 17m to liquidate the trust, while unitisation would be "very significantly cheaper".
Kepit is seeking to adjourn a meeting for shareholders and warrant-holders due next Tuesday to vote on its now defunct proposals made in June.
Kleinwort has bowed to shareholder disenchantment and wants to change Kepit from a closed-end investment trust into a unit trust.