The Crane Group has rejected the Fletcher Building Group's full takeover bid, calling it inadequate and "opportunistic".
Fletcher Building launched its hostile takeover bid last week.
The bid valued Crane at $A740 million ($NZ983 million).
Fletcher Building was offering one of its shares and $A3.43 for each Crane share.
The bid was conditional on, among other things, the acquisition of 90% of Crane shares.
Crane managing director Greg Sedgwick said the bid was inadequate and undervalued the company.
"The highly conditional offer fails to adequately recognise Crane Group's standalone value or the strategic value of the company to Fletcher Building.
"The offer does not take into account the substantial synergies expected to be available to Fletcher Building as a result of the acquisition," he said.
Craigs Investment Partners broker Chris Timms said the offer was made with a "hefty margin" over and above where Crane shares had been trading.
Fletcher Building's bid valued the shares around $A9, whereas they were trading at $A7.60.
However, they had reached a high of $A20 in July 2007.
"Even at the bid level, it was a considerable drop to where the shares have been in the past.
This is a good deal for Fletcher Building if they can get away with it."
Fletcher Building said it did not intend increasing the bid, but several things could happen, Mr Timms said.
A discussion document was due out next month which would tell Crane shareholders more about Fletcher Building.
The company already held 14.9% of Crane shares.
Crane shareholders might be tempted to sell because of the improving share price and Fletcher Building could pick up those shares.
Although one of the conditions had been 90% acceptance, Fletcher Building could decide to accept a lower threshold, Mr Timms said.
Crane's New Zealand unit encompasses Mico Plumbing and Pipelines, MasterTrade and Corys, an electrical supply business.
Mr Sedgwick said the group's directors recommended shareholders "reject the opportunistic bid and take no action at this time".
