The board of takeover target and IT provider Volante Group today unanimously rejected a bid of $1.01 per Volante share from Commander.
Volante described Commander's offer as "absurdly low, opportunistic and to be ignored".
"The offer fails to take into account the underlying strengths of Volante's business and the significant opportunities available to Volante," Volante said.
"The offer also ignores the substantial strategic benefit the acquisition would bring to Commander in the IT services sector."
Telecommunications company Commander launched its $130 million bid for Volante in December 2005, saying a successful takeover would give it access to larger clients.
"The (Volante) bid cannot be taken seriously, and the Volante directors are unanimous in rejecting this low-ball offer," Volante chairman Robin Crawford said.
Crawford said he and managing director Ian Penman had been acquiring more stock recently, and no Volante directors intended to accept the offer for their own holdings.
He said Volante's IT services division had strong margins and was responsible for more than half of Volante's profits.
Commander was aware of this and the potentially transforming impact that an acquisition of Volante would have for Commander.
"It is disingenuous for Commander to latch on to Volante's announced earnings downgrade last November to justify its low-ball bid," Crawford said.
"Whilst our products business has failed to meet our expectations recently, we have taken steps to cut costs out of this division and will be taking further steps to improve margins in that business."
Crawford said the Commander bid did not consider the growing strength of Volante's services businesses, whose clients include Telstra, Thiess, Santos and numerous state and federal government departments.
Volante expects to dispatch its target's statement containing its formal response to the takeover offer in about two weeks.
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