Kingspan Group's plans for an agreed bid for the British manufacturer of insulation products, Metsec, have been dashed after the Metsec board ended negotiations with the Irish group to begin talks on a takeover with an unnamed third party.

Metsec said that discussions with Kingspan had only reached "a very preliminary stage", indicating that no formal bid had been lodged by Kingspan. It is understood, however, that Kingspan made an indicative offer of around 200p sterling a share, valuing Metsec at £31.2 million sterling.

Suggestions that Kingspan may make a final offer for Metsec of 230p sterling a share are being treated with some caution in the market. Metsec shares traded up strongly after the announcement from the company of the termination of the discussions with Kingspan and the negotiations with the third party. The shares closed up 22p on 202p sterling, indicating that the market believes that any agreed bid will be pitched above 200p sterling.