But I am surprised that Blue Circle has commented on what was a private conversation."Analysts said that about 500p a share represented fair value for BCI, but they expected shareholders to accept an offer of about 480p a share.Mark Hake, analyst at Merrill Lynch, said: "420p is a rather cheeky opening shot They will now gauge the reaction of investors. I'm sure they recognise that they will have to raise their bid. But, in their favour, no one else seems to be even remotely ready to counter-bid."Two possible rival bidders - Holderbank of Switzerland and Mexico's Cemex - appeared to rule themselves out in statements made yesterday.The offer represents a 33.5 per cent premium to Blue Circle's share price on Thursday last week, the day before rumours of Lafarge's impending bid emerged. BCI shares raced ahead of the offer price to close up 23.5p at 437.5p.Following media leaks at the weekend, Lafarge made an "informal" approach to BCI on Sunday night.

It is understood that it offered 430p a share for BCI, but was rebuffed.Bertrand Collomb, the chairman and chief executive of Lafarge, said: "The figure talked about on Sunday was in the framework of a potential recommended bid. Lafarge, the French building materials group, yesterday pitched its long-awaited bid for Blue Circle Industries, the cement producer, but its first public bid came in at an unexpectedly low level. BCI rejected the 420p-a-share offer, which values the company at £3.4bn, as inadequate. "The price [offered] is even lower than that mentioned on Sunday, which significantly undervalued the company," BCI said. Investors were quick to bet that Lafarge would need to raise its bid.

Lafarge, the French building materials group, yesterday pitched its long-awaited bid for Blue Circle Industries, the cement producer, but its first public bid came in at an unexpectedly low level. It's too cheap, but probably irresistible to shareholders."For the year ended 31 March 1999, Meyer made an operating profit of £85.3m on sales of £1.3bn.. Savings of about £35m are expected from the deal within two to three years.A spokesman for Saint Gobain said that the Meyer outlets would not drop their existing products in favour of those produced by its new owner.After the deal, 25 per cent of Saint Gobain's sales will come from the retail and distribution of materials, with the balance coming from the production of glass, insulation materials and pipes.Stephen Rawlinson, an analyst at Peel Hunt, said: "We think this bid is too low, but not by much. Meyer will be combined with its Point-P and Lapeyre chains in France.The French company said the logic of the deal lay largely in the increased buying power it would give to the merchants in dealing with suppliers, which have been consolidating themselves.