An independent adviser has valued takeover target Comvita up to 60 per cent higher than the offer made by Singapore-listed Cerebos.
But independent directors of the NZX-listed health and skin care company say that is still too low.
Food and health supplements company Cerebos Pacific has offered $2.50 each for all shares in Comvita - known for its Manuka honey products.
Comvita's independent directors said a valuation range by independent adviser Grant Samuel of $3.40 to $4 a share in a report released yesterday did not fully reflect the company's potential and value.
Cerebos' local chief executive George Crocker said the company felt confident in the valuation that led to it making the $2.50 offer "but indeed there is a possibility of us increasing our offer, we just haven't formed a view on that yet".
The offer conditions of achieving 90 per cent of the voting rights could be relaxed, he said.
"And again that will have to be something that we consider carefully when we think about our next move."
Cerebos hoped to make decisions within a week if there were to be any changes to the offer, Crocker said.
Comvita's independent directors unanimously recommended shareholders reject the Cerebos offer, which the target company statement called "unsolicited, unwelcome and opportunistic".
Craigs Investment Partners analyst Selwyn Blinkhorne said $2.50 was not going to get Cerebos anywhere.
"The options available to Cerebos is they've got to increase their offer price by pretty much 50 per cent to get it up in the mid-range of the Grant Samuel valuation range or walk away."
Crocker said there was a big difference between delivering forecasts and delivering results.
"Forecasts are certainly no guarantee of performance," Crocker said.
"While Comvita has achieved growth in what is a very competitive space, you only need to look at its earnings track record to understand the risks associated with this business."
Comvita chairman Neil Craig said management and staff were focused and determined to deliver on many years of careful planning and investment in growth initiatives.
"This is not a time to sell your Comvita shares in the view of the directors of Comvita," Craig said.
"We're not for sale, none of the directors are accepting the offer."
There was no doubt the company's variable earnings history had impacted on the confidence of the independent adviser in accepting director and management forecasts beyond the current financial year, Craig said.
The company had a great level of confidence around this year's forecast and was working on longer-term projections which it expected to release to the market during the next two or three weeks, he said.
Te Puke-based Comvita has forecast normalised profit of $7.3 to $8.2 million and sales of $91 to $95 million for the year ending next March 31.
"Needless to say, the world is in a bit of turmoil and something can come back and bite you. We are a relatively small business, and from month to month our earnings fluctuate quite a bit but we have a high level of confidence on those numbers we've put out for this year," Craig said.
Comvita had created a platform to deliver increasing returns for shareholders.
"The independent directors do not consider that this is reflected in the valuation of the company by the independent adviser, let alone the offer."
There had been inquiries from other parties, but "whether they go any further I have no idea", Craig said.
Comvita's shares closed up 5c yesterday at $2.95.
* Health and skin-care product maker.
* Ingredients include Manuka honey and olive leaf extract.
* Listed on NZAX in 2004 and main board in 2006.
* $82m revenue in the year ended March 31.
* Food and health supplements business.
* Listed on Singapore Stock Exchange.
* Brands include Robert Harris and Fountain.
* $775m revenue in the year ended September 2009.
* $2.50 offer by Cerebos for all shares in Comvita.
* $3.40-$4 valuation range by independent adviser.
* Offer conditions include at least 90pc acceptance.
* Offer values the company at $70.5m.