Shareholders in Bodycote were yesterday unimpressed by a £1 billion offer for the metal coatings specialist from Sulzer, the oil and gas services company.

The 325p-a-share offer came after a month of fevered speculation that a bid for Bodycote was to emerge, and just days after John Hubbard, Bodycote’s chief executive, evaded questions about whether he had been in talks with a potential buyer.

Bodycote yesterday said that it had rejected the offer and that it believed it had “an attractive future as an independent company”. “The board urges shareholders to take no action in respect to their shareholdings and not to sell their shares into the market,” it said.

Sources close to Sulzer said yesterday that it would watch the response in the market to its approach and consider whether to launch a direct marketing offensive to investors. The Swiss company said that it had already spoken to some of Bodycote’s largest shareholders.

But shareholders said that Bodycote seemed justified in turning down the suitor, which had been stalking it since February 6. Sulzer met with Bodycote executives on February 12 and made an initial offer of 305p per share, which it later raised to 315p and finally 325p.

“They did approach people in a manner but I don’t think they were particularly supportive,” a shareholder said. “We think they were right to reject the offer at 315p and even 325p.”

Sources close to Bodycote said that, with the company share price high of 282p in the past 12 months, the offer under-valued the company.

Sulzer based its final offer on Bodycote’s shareprice on January 25, the day that speculation on a takeover approach emerged. The company said that the 325p per share offer represented a 41 per cent premium to the thenprice of 231p a share.

At the company’s results announcement on February 27, Mr Hubbard directly denied having received an approach from a private equity company, after rumours that Apax, the British private equity firm, was looking at the company.

However, he did not answer questions about whether Bodycote had received an offer from a non-private equity buyer.

The deal pits banks UBS, which is advising Sulzer, and Credit Suisse, advising Bodycote, against each other for the second time this week. The banks are also head to head on an unwanted bid this week by French reinsurer Scor for Swiss reinsurer Converium.

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