Rutland has set up a new company for the bid called Notemachine, which will be run by the former chief executive of Moneybox Peter McNamara.

Scott Tod initally floated on the AIM in 2003 at 25 pence a share. But the vendor has since struggled in the ATM market since it was involved in a reverse takeover in November 2003 with AIM-listed Darwen Capital.

Last year, the vendor incurred full year losses of £1.1 milllion after a poor performance from its network of about 2000 ATMs.

The 21 pence-per-share offer from Rutland represents a 56% premium to the price of 13.5 pence that the stock was prior to the announcement of the deal, which is the same price the shares were on 13 March when Scott Tod first disclosed that it was in takeover talks.

The Scott Tod board, led by David Massie, holds a 20.73% stake in the company and has backed the Rutland offer and is recommending that all other shareholders accept the deal.

Massie and the Tod family, who founded the firm in 1978, have been involved in a long-running dispute over how the company is run.

Last August Nicholas Tod, who owns 27% of the company with his wife, was ousted from the firm. In January this year Massie managed to hang on to his job after shareholders voted down resolutions to remove him at an extraordinary general meeting (EGM) called by Tod, who has wanted to remove Massie from the board and appoint himself, Roger Tod and Neil Phillips as directors of the company.

Notemachine says it has also got acceptances on behalf of a further 8.5 million shares from the Tod family, which represents a further 25.27% and takes the total to around 46%.

Commenting on the offer from Rutland, Massie says: "The published results of Scott Tod in recent times have not met the hopes of shareholders or their expectations at the time of the reverse takeover of Scott Tod Developments Ltd in November 2003. This offer provides an exit in cash for those who wish to pursue alternative investments while the bidder will be able to provide additional funding to aid future growth."