M&G, Newman Tonks' biggest shareholder with an 11.2 per cent stake, irrevocably accepted FKI's offer on the day the bid was launched while Britannic Assurance, another institutional investor, also pledged its 2.2 per cent stake.
The move was unusual because M&G, which said Newman Tonks had "demonstrably underperformed", tends to back incumbent management.
But in his first response, Geoff Gahan, Newman Tonks' chief executive, queried the fund manager's decision: "I find their behaviour quite strange. Why didn't they sell their stake when the share price was higher earlier this year? They have never forgiven us for realigning [cutting] the dividend four years ago."
Mr Gahan was speaking after Newman Tonks announced the sale of its 33 per cent minority interest in Tesa, its Spanish security products manufacturer to Williams, the diversified industrial group, for pounds 27m. The deal, which is subject to shareholders' approval unless FKI's offer lapses, reduces Newman Tonks' gearing to about 10 per cent.
"We are deploying financial resources away from areas not considered hard core and concentrating on controlling interests in businesses with potential for strong growth in international markets," Mr Gahan said. But he declined to say whether other deals were in the pipeline as part of Newman Tonks' bid defence. Last night FKI posted its offer document to Newman Tonks' shareholders, a move that sets the 60-day bid timetable clock ticking.
FKI urged shareholders to "exit a business with a dismal track record at a significant premium" and to "participate in a business with a strong management team and a proven track record".
Halifax-based FKI is offering a mixture of cash and shares worth 150p, or pounds 196m, and a 140p cash alternative. FKI says it is offering at least 20 times the consensus forecast earnings for Newman Tonks this year.
The offer is being funded by a fully underwritten conditional rights issue of two new FKI shares for every 13 existing shares held at 175p to raise pounds 152m. The rest of the deal will be funded from internal resources, taking FKI's gearing up from more than 60 per cent to 80 per cent.
Newman Tonks is FKI's first hostile takeover. In his letter to shareholders, Jeff Whalley, FKI's chairman, said he had approached Newman Tonks' board with a view to making a recommended offer but had been unable to establish a meaningful dialogue.
Mr Gahan dismissed FKI's latest move. "There is nothing new in the document which only confirms their derisory offer.It will be a long hard battle."