Brian Larcombe, the 3i chief executive, has adopted a very high-risk strategy for 3i by refusing to come up with the knockout bid the market wanted to see. If he pulls it off, he will look very clever. But Electra shareholders should think long and hard before accepting his mix of cash and 3i shares.
Until the Inland Revenue holed Electra's defence earlier this week by ruling that the taxman was entitled to a share of Electra's planned pounds 544m buyback, Michael Stoddard and his team seemed to have the better of the play.
Electra's shareholders would plainly have been best served if they had been offered a similar reconstruction plan at a much earlier stage. As it is, it had to be coaxed out of Mr Stoddard, under threat of a hostile bid. Even so, he has demonstrated considerable value locked up in Electra's portfolio of unquoted investments, and the scheme Electra is putting in place gives management all the incentive it needs to realise that value within a realistic timeframe.
Shareholders who reject bids and put their faith in promises from management to do better are frequently disappointed. But in this case, shareholders ought to vote yes to Electra's defence and say no to 3i.