The put up or shut up deadline comes as May Gurney shareholders received details about when to vote on the recommended £178m offer from Costain, being recommended by both boards
Merger proposals will be voted on by May Gurney shareholders on the 7 and Costain’s shareholders on the 8 May.
To prevent any disruption, Kier has been given until 5pm on 26 April to decided whether it is going to table a rival offer.
Kier is presently going through May Gurney’s books to see whether it can better Costain’s offer.
This will see each May Gurney shareholder receive 0.8275 of a new Costain share, or about 252 pence per share, a 37% premium to May Gurney’s share price when the proposed merger deal was unveiled.
The merger will create a company with a turnover of £1.6bn, which would be able to bid for bigger contracts.
The new combined company would be 53% owned by former Costain shareholders with former May Gurney shareholders having a 47% holding.
The deal is expected to be rubber-stamped by early June.
The enlarged company will concentrate on the rail, highways, water, waste, airports, hydrocarbons, power, nuclear, local government and fleet management.
Costain’s board believes it can save at least £10m following the merger through shared back office functions with the loss of less than 150 jobs across both firms which would employ a total of 15,000.
But Kier threatened to torpedo the deal by issuing a statement to shareholders claiming a merger with it would generate greater value.
It said combining Kier and May Gurney would establish a market-leading and well-balanced business that could offer an unrivalled range of services to local authorities as well as providing Kier with greater access to the regulated sector.