Investcorp has also tabled a bid for British Printing Company, the privately owned printing group which specialises in weekly magazines. Richard Warner, a director of Investcorp, said a combination of Watmoughs and BPC would be a more viable competitor in the European market.
The 345p a share bid for Watmoughs trumped an earlier offer, pitched at 257p a share, from the Canadian group Quebecor. Watmoughs had rejected Quebecor's offer.
Last night, Quebecor said it would "clarify its position" after the competition authorities had decided whether to refer Investcorp's bid to the Monopolies and Mergers Commission. Earlier yesterday, the Government gave Quebecor's own offer the green light.
Quebecor said: "The public interest issues raised by this bid regarding the impact on both customers and employment in the UK. are significantly more complex than those raised in Quebecor's bid for Watmoughs."
However Investcorp, whose bid is conditional on it not being referred to the MMC, pointed out that BPC and Watmoughs would have less than 20 per cent of the UK market. "We don't believe we will have any regulatory issues," said Mr Warner.