Hopes of Malaysia-based palm oil giant Kuala Lumpur Kepong snapping up MP Evans suffered a body blow when the target company revealed it had support from holders of more than half its shares for rejecting the £360m ($440m) bid.
London-listed MP Evans, which operates in the main in Indonesia, restated that it was rejecting a 640p cash offer from Kuala Lumpur Kepong saying that the bid was "wholly inadequate and very substantially undervalues the company, its unique position and its future growth potential".
And MP Evans said it was "pleased to announce" that it has received the "immediate and unequivocal support" in its stance from investors holding 54.7% of its shares.
"On the basis of these letters of intent to reject the offer… the offer cannot succeed and will fail," MP Evans said.
Indeed, Kuala Lumpur Kepong – better known as KLK, and which, with a stockmarket value of more than $6bn, is one of the world's biggest plantations groups – said when unveiling its offer yesterday that the bid was conditional on gaining acceptance from holders of at least 50% of MP Evans shares.
However, a dearth of reaction on Wednesday by MP Evans shares – which, thanks to KLK's announcement soared more than 40% on Tuesday to a record high - suggested that investors believe that the takeover saga is not over yet.
The shares on Wednesday closed unchanged at 610p.
Peter Hadsley-Chaplin, the MP Evans chairman, terming KLK's offer "highly opportunistic and wholly inadequate", said that the bid "reflects neither the existing value of the group's plantations nor the future value from its clearly defined strategy substantially to increase its planted hectarage".
This growth strategy "remains firmly on track", Mr Hadsley-Chapli said.
"The group's proven record for operational excellence underpins the board's confidence in executing this strategy successfully and delivering significant long-term value."
Prior to the company's announcement, broker VSA Capital said the offer undervalued MP Evans, considering previously completed deals for London-listed palm oil producers.
VSA Capital compared to Sime Darby's US$24,422 per planted hectare acquisition of New Britain Palm Oil and Felda Global Venture's US$21,098 per planted hectare acquisition of Asian Plantations.
"We agree with the board that this offer undervalues the business," said Edward Hugo, head of research at VSA Capital.
"We would now look to see whether KLK increases its offer, or a counter-bid is made by another party," Mr Hugo said.
By Tanya Ashreena and Mike Verdin