Baird snubs £17m offer from rival clothing firm Jacques Vert

William Baird, the troubled clothing group, yesterday rejected a takeover offer from its rival Jacques Vert that values the former textile manufacturer at just over £17m.

But Baird, which has never recovered from Marks & Spencer's 1999 decision to end a 30-year relationship, left open the possibility of an agreed deal by admitting it saw "commercial logic" in combining the two groups. Jacques Vert, the mother-of-the-bride womenswear specialist, is offering a straight share swap, which represents a 3.5 per cent premium to Baird's share price last night. It said the bid was supported by Baird's two biggest shareholders ­ Alchemy Partners and Schroder Investment Management ­ giving it acceptances of 47.55 per cent.

Vert, itself no stranger to tough times, is hoping that adding Baird's Windsmoor, Planet and Precis Petit ladieswear lines to its classic womenswear brand will give the enlarged group greater clout with institutional investors.

Bill Reid, the chairman, said Vert would sell on Baird's loss-making casualwear brands, which include Lowe Alpine, as well as its remaining engineering and manufacturing facilities, including factories in Sri Lanka and Portugal.

Lord Wolfson of Sunningdale, the chairman of Baird, said the bid undervalued his group which would contribute 75 per cent of sales if the two companies merge. "We advise shareholders to take no action," he said, adding that the board had agreed to talk to Mr Reid.

A takeover would close the book on Baird's historic position at the heart of British manufacturing. After M&S's decision to axe its supply agreement with Baird, the group has broadly failed in its attempt to rebuild itself as a retailer of womenswear and sports leisure brands.

In dismissing Vert's offer, Baird said it was close to selling its activewear division for as much as £16m.

However, Mr Reid was confident that Baird would come round to his offer. He said Lord Wolfson was a "fair and open-minded man" and he hoped to "be able to convince him that our case was a good one".

In addition to £18m of debt, Vert would be taking on Baird's considerable pension liabilities, which it calculated amounted to a £20m deficit under FRS 17. Shares in Baird and Jacques Vert both fell 0.75p, closing at 14.25p and 14.75p respectively.