VAN hire group Northgate last night confirmed it had received a takeover offer of £12 a share, valuing the company at about £774m.

The Darlington plc did not name the bidder but it is widely believed to be private equity group Terra Firma, owned by businessman Guy Hands.

It followed reports yesterday that the bid had been received.

A statement from Northgate to the Stock Exchange said: "The board of Northgate notes the recent Press speculation regarding the company and confirms that it has received an indicative offer for the company of 1200p, in cash, per ordinary share.

"The board is considering the terms of the indicative offer and is consulting with its principal shareholders.

"At present, there can be no certainty that any formal offer will be forthcoming, nor as to the terms on which any offer might be made. This announcement is made without the potential offeror's consent.

"A further announcement will be made when appropriate."

It is believed major shareholders will not support the bid.

Analysts said the offer undervalued the company, which is the market leader in the UK and Spain, where its operations are thriving.

Northgate said that the offer was subject to due diligence. Terra Firma is believed to be looking at the company's books, while the Northgate board is sill considering whether to back the bid.