MJ Gleeson has rejected a possible offer by Castle Acquisitions of £197.2 million opening the way for a possible hostile takeover. Castle submitted a proposal following a meeting between the respective chairmen, Christopher Mills of Castle and Dermot Gleeson of Gleeson, on December 12 2005. The price was based on the value of a Castle share worth 3450p and a Gleeson share valued at 300p on December 9. The price valued Castle at £5.44 million, but it says it has a pension surplus worth £27.5 million. Shares in Gleeson rose in response to the possibility of a bidding battle for the civil engineering and housebuilding group. In a statement Castle said: “The Board of Castle Acquisitions is disappointed that the Board of Gleeson decided to formally reject the Possible Offer without further exploring the potential benefits of its proposals. Accordingly, Castle Acquisitions intends to consult directly with Gleeson's shareholders to establish whether or not a possible offer should be pursued. Castle Acquisitions does not intend to withdraw its interest from a transaction the Company believes to be in the best interests of the shareholders of both Castle Acquisitions and Gleeson.”