By the close yesterday lunchtime Kalon had received acceptances from 21 per cent of Manders' shareholders.
Mike Hennessy, Kalon's chief executive, said: 'We were soundly beaten. We have obviously performed better than Manders in all respects but we failed to convince the institutions that we were a better-run company and would have made more of Manders.
'It is a missed opportunity for Manders' shareholders.'
Last week the Independent revealed that British Steel Pension Fund, holder of 22 per cent of Manders, was to spurn Kalon's approach. Mr Hennessy said yesterday that BSPF had appeared to lead the other large institutions into rejection of the bid.
Manders' chairman, Roy Amos, said he was pleased shareholders had placed their faith in Manders' existing management. He added that the failure of the bid demonstrated that the price Kalon offered was too low.
Kalon planned to cut costs by making 500 of the proposed combined workforce of 2,600 redundant. Manders' Windeck paint plant at Bingley in Yorkshire would have been closed.
Mr Amos said: 'It is important we haved saved those jobs.'
Kalon launched its assault in the second week of June when the stock market and its own shares were riding high in the honeymoon period after the Conservative general election victory.
The attractiveness of Kalon diminished with the falling stock market. Kalon shares were 109p in June but fell to 82p during the course of the bid.
At the outset the bid valued each Manders share at 291p, and by yesterday at 232p. In the market they fell 2p yesterday to 186p.
The initial all-share terms valued Manders at pounds 106m. But despite improving the offer and adding a partial cash alternative the takeover terms valued Manders at pounds 85m at yesterday's close.
Mr Hennessy said he was annoyed that one institution refused to meet the company and hear the proposed strategy. He refused to say which institution it was, but it was neither BSPF nor Finsbury Asset Management.
Finsbury said that it was rejecting the offer shortly after BSPF. Finsbury is closely associated with Rea Brothers, who manage Manders' company pension fund.
'You can draw your own conclusions from that,' Mr Hennessy said.Reuse content