Australian rental company National Hire Group Ltd. and private equity firm The Carlyle Group followed up an earlier bid to acquire Australia’s largest rental chain Coates Hire Ltd., only to have it once again be rejected by Coates management.

The AU $1.3 billion offer (about U.S. $1.32 billion) is believed to be higher than the group’s initial rejected offer. Coates chairman Bill Cutbush said the new bid, about AU $6.40 per share, still undervalues the company “and is again not at a level that justifies recommendation to its shareholders.”

Cutbush added that the offer “contains numerous material conditions, including in relation to financing and other material commercial matters, which are unacceptable.”

Cutbush said the company would consider any bid above $6.40 per share, but declined to put a value on the company. Analysts said Coates would be unlikely to look at any offer below $6.50 per share. “[The company has] a strategic plan in place, the market’s still strong, they don’t have to panic sell, the ball’s in their court,” Citigroup analyst Julian Mulcahy told Reuters.

National Hire Group’s executive chairman Ray Romano said he could not disclose details of the original offer because of confidentiality agreements, but said Coates is a desirable acquisition for the smaller NHG. Romano said operating synergies from a merger would be worth tens of millions of dollars. Romano said National Hire was considering options including a higher bid or a hostile takeover.

Sources familiar with the deal said a hostile bid appeared unlikely, even though most institutional shareholders supported the bid.