London, England - Investors in BPB, the British plasterboard company, are holding out for a takeover offer of at least 760p a share from Saint-Gobain, its French rival, analysts said yesterday.

One analyst told The Times that he had held discussions with all of BPB’s biggest shareholders and that “an offer of between £7.60 and £7.70 a share should just clinch it”.

M&G, Standard Life, Sprucegrove and Threadneedle are BPB’s four biggest shareholders, with a combined holding of about 25 per cent. Hedge funds, which have bought into the company recently in the hope of making a fast profit, account for a further 20 per cent of the shares.

An offer at 770p would value BPB at £4.4 billion, including about £500 million of debt. It would be a 7 per cent increase on Saint-Gobain’s latest bid of 720p a share, which BPB’s management said “massively” undervalued the business.

The French company, which initially bid 675p a share in July, has until Friday to either secure a management recommendation, elect to make a hostile bid or withdraw its offer.

Analysts expect it to raise its offer. They predict that the company will bid about 760p, the minimum level at which shareholders have indicated they would consider selling. Saint-Gobain is expected to sound out BPB’s management informally over the next few days about the possibility of making a third offer. At the same time, Saint-Gobain will begin to court BPB’s shareholders. It might approach them with a hostile offer if it fails to succeed the backing of BPB’s management.

BPB’s management team, led by Richard Cousins, chief executive, and Sir Ian Gibson, chairman, is thought to want at least 800p a share before it would consider selling the business.

The UK company has put out defence documents saying that an offer would have to be 832p a share to reflect fully the value of the business.

BPB has mounted a vigorous defence against the bid since summer, including returning £600 million to investors and promising double-digit earnings growth for the next five years.

Last week, BPB reported a 10.8 per cent rise in pre-tax profits to £160.6 million for the six months to September. The target company also said that it had spent £25 million trying to repel the takeover bid.

Mr Cousins also provided a more upbeat full-year outlook. He predicted that the final underlying pre-tax profit figure would be “more than” £350 million, compared with a previous forecast of “not less than” that sum.