CNH Global received a blow in its attempt to buy Kverneland after the Norwegian farm equipment group's main shareholder sold out to rival bidder Kubota Corp, which upped its offer by nearly one-quarter.

Umoe - an investment group founded by Jens Ulltveit-Moe, the Kverneland chairman - sold its 31.8% stake to Kubota, the Japanese tractor maker, for NOK10.50 a share.

The price was NOK2.00 above that Kubota offered last week, and NOK1.00 above proposals by rival suitors CNH, the US-based maker of Cane and New Holland farm equipment, and China's Chery Heavy Industries.

In a further blow to CNH's aims, Kverneland threw CNH and Cheryl beancounters out of its data room, where they had been examining accounts in preparation for firm bids.

"As a consequence of the agreement between Kubota and Umoe, Kverneland has decided to terminate the due diligence processes being conducted by CNH Global and Chery Heavy Industry with immediate effect," Kverneland said.

Share reaction 

However, investors kept alive ideas of a still-higher bid yet emerging, lifting Kverneland stock to a three-year high of NOK10.65 at the close in Oslo, above the Kubota offer, which is to be extended to other shareholders too.

In the absence of expectations of a rival offer, the share price should settle marginally below the offer price - the discount reflecting risk of the deal falling through, and the time value of money, in the delay before investors will receive their bid proceeds.

CNH Global declined to comment to Agrimoney.com on its intentions, saying it was not for now commenting beyond a statement on Monday in which it revealed its NOK9.50 a share proposal.

After-deal plans 

Kubota is early next month to send Kverneland shareholders details of tender for the rest of the shares in the group, which will be undertaken on the same terms as the Umoe deal, valuing the group at NOK1.6bn, more than $270m.

The outcome of the tender, to occur in the first half of next year, will not affect the Umoe deal, with Kubota sticking by its purchase of the holding even if no other shareholders offer up stock.

The Japanese group, which is believed to see a Kverneland acquisition as a means of accelerating expansion in Europe, has signalled that its deal would not herald a significant shake-up, with job losses not in the pipeline.

"Kubota has no current intention to introduce any major changes to the business of [Kverneland], change the domicile of the company, affect the current operations of any member of the company group or discontinue the  employment of any of the existing employees of the company group," Kverneland said.

CNH Global shares ended 1 cent higher at $36.86 in New York.