Salvesen open to higher offer

Christian Salvesen rejected the proposed pounds 1bn offer from Hays, the rival transport group, yesterday describing it as "inadequate", though it left the door open for a "significantly" improved approach.

At a crunch board meeting in London, which included two members of the controlling Salvesen family, the directors voted unanimously to reject the 370p-a-share offer following advice from their advisers, SBC Warburg.

In a letter to Hays, Christian Salvesen said: "You have indicated in both your letters that you may be prepared to improve your terms. The board would consider a significantly improved financial proposal should you wish to make one to it."

Salvesen chief executive Chris Masters stressed that the board was "in no way soliciting an offer". He repeated his view that he did not consider the industrial logic of the deal compelling and that it did not reflect the value of the company.

Hays said it was "considering" its position but it seems unlikely that the company would give up after the first attempt. One institutional investor described the 370p offer as "just a sighting shot". Ronnie Frost, chairman of Hays, has not ruled out going hostile but would prefer to reach an agreed deal as the Salvesen family controls 38 per cent of the shares. Some family members have expressed interest in an improved deal and this may give Hays hope that it can get some of the family on its side.

However, it is unclear how much higher Hays can afford to go. An offer above 400p is considered unlikely. Christian Salvesen shares fell 4p to 356p with Hays unchanged at 429p.