Takeover target Spotless Group says it will only support an offer from a private equity suitor if its bid is boosted to $743 million.

Spotless has been in talks with Pacific Equity Partners (PEP) since the private equity firm lodged an indicative offer of $2.63 per Spotless share late last year.

The offer was rejected as too low, prompting PEP to boost its bid in December to $2.68 per share, valuing Spotless at about $711 million.

But the cleaning and hospitality services company said on Monday it would only recommend a takeover offer to its shareholders if it was offered $2.80 per share, which values the company at $743 million.

“This is the lowest price at which the Spotless board would be willing to unanimously recommend a scheme of arrangement,” the company said in a statement on Monday.

The $2.80 price represents a 39 per cent premium to the price of Spotless shares, before PEP’s interest became public.

The price considers the “significant investment that Spotless has made for the medium and long-term benefit of the business, and ensures that all shareholders are adequately compensated for this investment”, the company said.

Spotless shares rose four cents on Monday, or 1.7 per cent, to $2.37.

PEP may or may not agree to these terms, Spotless said.