Investors vent their anger at undisclosed bids for Ashtead

Ashtead, the plant hire group, yesterday drew the wrath of institutional funds after dismissing an all-cash offer and six other bids for the group without putting the offers to shareholders. The shares fell 33p, or 26 per cent, to 128p as Ashtead said it had rejected an all-cash offer on Wednesday morning at a premium to Tuesday's closing price of 161p. The offer is believed to have been in the 180p to 190p range.

Ashtead, the plant hire group, yesterday drew the wrath of institutional funds after dismissing an all-cash offer and six other bids for the group without putting the offers to shareholders. The shares fell 33p, or 26 per cent, to 128p as Ashtead said it had rejected an all-cash offer on Wednesday morning at a premium to Tuesday's closing price of 161p. The offer is believed to have been in the 180p to 190p range.

Analysts and institutional fund managers attending Ashtead's results yesterday criticised the management for failing to give them a chance to accept the bids. Many were looking for a respectable cash exit from the group to provide funds to be reinvested in mobile giant Vodafone AirTouch. One said: "We ended up just going round and round in circles, asking why they hadn't put it to us."

Salomon Smith Barney, the investment bank, was advising Ashtead. Peter Lewis, Ashtead chairman, yesterday admitted that the collapse in the shares made Ashtead more vulnerable to a bid at a lower price than the one he had recently dismissed. "We are obviously temporarily vulnerable. We knew it was a clear risk in the short term."

However, he assured investors that his decision was based on shareholder value, as he owned 4.5 per cent of the company and was heading for retirement in December.

The bid is thought to have been the highest cash bid the group received. But sources say Salomon Smith Barney, which was engaged to find possible buyers, found several cash and shares offers worth more than 200p per share.

Mr Lewis said any hopes of generating an auction for Ashtead had evaporated when highly-rated US plant hire rivals suffered a shares downturn in the autumn, weakening their power to raise cash.

He said the UK business, which posted underlying flat profits, had suffered because managers had flown to the US about twice a month to present to possible bidders. Since Ashtead announced it was looking for buyers last year, rivals had sought to exploit anxiety among staff by poaching them.

Some analysts defended the group. One said: "With the interest in other building-related groups, there may have been some sense in rejecting the offer at this time." The shares were the worst performer in the FTSE 250 yesterday.