Management at Salvesen, whose operations range from food transporters to power hire, disputes the case Hays has advanced for combining the groups, including an estimated pounds 20m cut in costs from combining the companies' head office operations.
It dismisses as "laughable" suggestions of an overlap between its Aggreko power hire and temperature controls systems rental business and Hays' Rentacrate operation. The Atlanta Olympics, for example, has a wide range of Aggreko products on hire.
Analysts following the sector are advising clients to sit back and await an aggressive bid.
Ronnie Frost, Hays' chief executive, is keen to emphasise the industrial logic of a deal, stressing the two companies' complementary qualities. Salvesen's presence in European food distribution would give Hays a platform to expand into a market where margins are still high. Both companies also distribute food stuffs in the UK, where margins have been battered by the buying power of the big supermarket chains.
European stores, however, want to see Britain's unrivalled technical supremacy in this market imported to the Continent.
Salvesen's board will meet on Wednesday to decide its response. One large unknown in the equation, however, is the large family holding in Salvesen - almost 40 per cent. The shares have performed unimpressively. From 217p five years ago, they were at 240p shortly before details of Hays' intentions began to leak. Family shareholders may well prefer to put their money elsewhere. But capital gains tax liabilities suggests an all-paper offer would be preferred. The City expects an offer to be pitched at a minimum of 350p a share. Salvesen closed at 361p on Friday, up 12p.Reuse content