Swiss measuring technology group Leica Geosystems says it is taking a neutral stance on takeover bids from Sweden's Hexagon and Danaher of the United States.
It is a move that officially ends Leica's support for a white knight or friendly bid from Danaher following a hostile offer from Hexagon.
In a statement on Friday, Leica Geosystems explained that it was taking a neutral position after Hexagon raised its offer on Monday from SFr440 ($345.7) in cash per share to the equivalent of SFr573 per share, including five Hexagon B shares.
It added that it would make a statement on the Hexagon offer in a few days.
Before Friday's announcement, Leica Geosystems' board of directors had advised company shareholders to accept Danaher's bid of SFr500 per share and had entered a transaction agreement.
Due to Hexagon's raised offer, the board of Leica agreed with Danaher to end the transaction understanding with immediate effect, Leica said in its statement.
Hexagon, which is active in engineering, metrology and polymers, made its original bid of SFr440 per Leica share in June, valuing the company at about SFr1 billion. But the Swiss company rejected this, arguing that it was too low.
Danaher, which produces professional instruments and tools, has not given up the takeover battle, saying it is still open to discussions with Leica.
In a statement from its headquarters in Washington, Danaher confirmed that its offer of SFr500 in cash per Leica share remained open. It said that in line with takeover regulations it would now extend this offer – currently expected to close on September 23.
Danaher said it believed Leica's shareholders should carefully consider the underlying value of Hexagon's offer.
Danaher has raised a number of issues concerning the underlying value of the shares offered by Hexagon in its revised offer.
These include the liquidity of its rival's shares, Hexagon's high net debt levels following the offer and the inferior voting rights of the Hexagon B shares.
The US company also argued that Hexagon had not clarified the impact of its proposed rights issue on Leica shareholders who accept the Hexagon offer. It said accepting shareholders might be required to reinvest up to SFr37 per Leica share in additional Hexagon B shares to avoid dilution.
swissinfo with agencies
Hexagon's original bid: SFr440 per Leica Geosystems share, valuing the Swiss firm at about SFr1 billion.
Subsequent Danaher offer: SFr500 per Leica share, valuing the company at SFr1.17 billion).
Hexagon's latest bid, which includes company shares: SFr573, valuing Leica at more than SFr1.44 billion.
The share price of Leica Geosystems has risen by about 60 per cent since the beginning of the year.
Leica Geosystems is almost 200 years old.
The company is active worldwide and has its headquarters in Heerbrugg near St Gallen.
It employs more than 2,400 people in 23 countries, with 900 in Switzerland.
Leica Geosystems recorded a net profit of SFr50.6 million on sales of SFr773 million in its last fiscal year.
In compliance with the JTI standards