Opposition to a $322.5 million hostile takeover bid for Hellaby Holdings is building as investors weigh up the offer from ASX-listed autoparts company Bapcor.

Salt Funds, ACC and Castle Investments - who collectively own 30 per cent of the NZX-listed investment firm - have given the deal their seal of approval through entering a lock-up agreement to sell their shares.

But other investors and the board of the company, whose businesses include footwear chains Hannahs and Number One Shoes, aren't so sure of the bid's merits.

Aaron Bhatnagar, whose family owns 1.2 per cent of Hellaby, said the $3.30 a share offer for full control was too low.


"The company has gone to significant efforts to reshape its business model," Bhatnagar said.

"Shareholders have every right to say, 'Hang on, we have been promised a better future' and there is a board and management that has been very confident in the future of this company. Perhaps we should back that confidence."

Hellaby shares recently traded at $3.31, 1c above Bapcor's offer price and 9.2 per cent higher than Monday's closing price of $3.03, before the bid was unveiled on Tuesday.

"There probably is a bit of an expectation of a higher offer if [the shares] are trading above the offer price," said James Grigor, of Macquarie Private Wealth.

Last month Hellaby reported a 30 per cent decline in annual profit, to $19.6m, having cut back earnings guidance earlier this year.

Bhatnagar said he was confident about Hellaby's future prospects, particularly as the company had flagged the potential for some of the cash from the $81m sale of its equipment group, which settles this week, to be used for "bolt-on" acquisitions for its automotive division.

"That division has been a winner for Hellaby," he said.

Victoria-based Bapcor intends to de-list Hellaby and then divest its footwear and resources divisions so it can focus on the automotive business.

Hellaby's board has "strongly" recommended shareholders put off selling until it provides more guidance.

Managing director Alan Clarke said the board was "quite clear" that the offer undervalued the company.

"We have heard the commentary that it's opportunistic and we don't disagree with that," said Clarke, who was forced to cancel the rest of an investor road show in Australia and fly home to deal with the takeover.

"We see the value as significantly more than that."

Clarke joined Hellaby in November after stint at the helm of Abano Healthcare, where he fended off multiple takeover bids.

Since arriving at Hellaby he has moved to reshape the company's portfolio.

Grigor, of Macquarie, also said the offer appeared opportunistic, coming while the stock was at "pretty low levels" and following the arrival of a fresh CEO with a new strategy.

"Investors should be waiting and seeing if a better offer can be formalised," he said.

"The new CEO seems like he has a good handle on the business."

Bapcor may waive the condition to achieve 90 per cent acceptances, provided it gets more than half of the shares on issue and Overseas Investment Office approval, in which case it would seek board representation to push for a shift in Hellaby's direction.

- Additional reporting BusinessDesk