CNH Global and China's Chery Heavy Industry swooped on Kverneland with a near-$250m bids opening a three-way takeover battle for the Norwegian farm equipment group against Japan's Kubota.

US-based CNH, the maker of Case and New Holland farm equipment, revealed a "non-binding" offer for Kverneland of NOK9.50 a share, conditional on factors including the clearing of the Norwegian group's accounts.

The offer trumps by NOK1 a share a bid unveiled by Kubota last week, a deal which was recommended by Kverneland directors and backed by its biggest investor, Umoe.

But later on Monday, Kverneland revealed it had also received a NOK9.50-a-share bid from Chery Heavy Industry, also subject to due diligence, and to being accepted by holders of two-thirds of shares in the Norwegian company.

Battle of the beancounters

CNH looked to be ahead in the battle to complete due diligence, indicating a December 22 finish date which Chery has failed to match, requiring "more time to conduct" their scouring of  Kverneland accounts.

From CNH, "a binding offer letter, if made, is intended to be made on 23 December", Kverneland said.

The Norwegian group said it would consider both offers if and when they were confirmed, adding that it had informed Kubota about the rival bids.

Investors, however, were betting on extra money being required to seal a deal, sending Kverneland shares soaring 18% to a three-year high of NOK9.98 in Oslo, above the price proposed by Chery and CNH, implying they expect a still-higher bid.

In the absence of expectations of a rival offer, the share price should settle near the offer price - with a small discount to reflect risk and the time value of money, in the delay before investors will receive their bid proceeds.

The shares closed at NOK9.95.

Deal wave

The bid battle comes amid a wave of takeovers in the agribusiness sector, whose relative buoyancy contrasts in many Western countries with difficult times in other industries, as highlighted by US data last week.

Last month alone, US-based farm equipment group Titan Machinery bought a Romanian peer to fulfil long-held ambitions to expand into Europe, while the pulses sector witnessed two acquisitions within hours, and Bunge, the world's biggest processor, entered the palm oil sectorthrough an Indonesian deal.

CNH rival Agco, the maker of Massey Ferguson equipment, in October bought silos-to-poultry-feeders company GSI Holdings for $940m.

CNH's bid comes as its chief executive, Harold Boyanovsky, prepares at the end of this month to pass on the reins to Richard Tobin, a former executive at Societe Generale de Surveillance, the acquisitive Swiss-based inspection and testing group.

'Complementary strengths'

Kubota is believed to see a Kverneland deal as a means of enhancing its grip on the European farm equipment market, in which it has gained a hold in the main in the small and medium size tractor segments.

Kverneland has historically been known for ploughs, expanding more recently into producers such as seed drills, mowers and balers.

Kverneland in October sealed a sell to sell some of its products in North America thought CNH's New Holland distribution network.

Ingvald Loynin, the Kverneland chief executive, said at the time that this was "an important development for us and we are confident that the complementary strengths of the partnership will provide true benefits for our joint customers".

Abe Hughes, vice-president at New Holland agricultural equipment, said that the tie-up would "begin a partnership that has the potential to include future product development, leveraging the strengths of these two agricultural equipment leaders".

CNH shares closed down 0.9% at $35.01 in New York.