Cidron Services, which is owned by Swedish private equity firm Nordic Capital, has offered EUR15.50 per share in cash for TietoEnator, which represents a 38% premium to the stock's closing price of EUR11.27 on Wednesday.

But in a statement, Matti Lehti, chairman of the board, TietoEnator, says the vendor "will investigate the matter in detail" but the offer "does not reflect the true value of TietoEnator shares".

However, in a document detailing the bid, Robert Furuhjelm, director, Cidron Services and partner, Nordic Capital, argues that the offer is a "very attractive proposition for TietoEnator's shareholders both from a value and certainty perspective".

"TietoEnator is a leader in a sector facing change. We are convinced that for the next phase TietoEnator can better restore its position and realize its full potential as an unlisted company without having to focus on short-term financial performance," he says.

The hostile bid comes at the same time as TietoEnator is pushing through a restructuring and cost cutting programme designed to generate annual savings of more than EUR100 million by the end of 2009.

The performance improvement programme, which kicked of in January, followed an 18-month run of volatile earnings at TietoEnator, which has mainly been been caused by project over-runs in the company's banking and insurance and healthcare and welfare units. The vendor is also eliminating 800 jobs, mainly in Finland and Sweden.

The company's poor performance led to the departure of CEO Pentti Heikkinen who was replaced by Hannu Syrjala in February.

Cidron Services says it will install Harri Koponen as executive chairman of the company if the transaction goes through.