TLG' s board yesterday recommended a cash offer from Cooper Industries, the US lighting group, which values its shares at 160p.
However Wassall, which has built up a 14.02 per cent stake in TLG over the past year, refused to rule out launching a higher offer. David Roper, the deputy chief executive of Wassall, was reported as saying that the company was reviewing its options and could choose either to accept the bid or enter the fray. Wassall could not be reached for comment last night.
The speculation sent TLG shares soaring 17p to 166.5p - a premium to the price offered by Cooper - suggesting that the City expects a higher offer.
Hamish Bryce, the executive chairman of TLG, said the group had been in talks with a number of potential suitors since 31 July, when it first revealed that it had received an approach. However, the group is understood not to have had any talks with Wassall.
Analysts said Cooper's bid, which values TLG shares at a multiple of 18.8 times pre-exceptional earnings, was not a knock-out blow and may have to be raised. Warburg Dillon Read, the investment bank, was yesterday morning believed to be buying shares in the market on behalf of Cooper in an attempt to strengthen its position.
The deal marks an end to a mixed four-year tenure on the stock exchange for TLG. The company, which was a management buyout from music group Thorn EMI, floated at a price of 115p in 1994. After initially performing well, its shares slumped in 1996 when the European lighting market was hit by overcapacity and falling prices. More recently the group had been hit by worries about a slowdown in its Far East markets. Earlier this year the shares hit a new low of 92p.
Mr Bryce said the deal would give Cooper a global position in the lighting fittings market. "They're buying the number two player in Europe behind Philips and a leading position in the Far East." He added that the deal marked a "step change" in the expansion of TLG's operations.
Last year Cooper bought Menvier-Swain, the emergency lighting group, for pounds 165m. "In a stroke, they've created a global player," said Mr Bryce. However, he said it was too early to say whether TLG and Menvier-Swain's operations would be integrated or whether there would be significant job losses.Reuse content