Hardman director, Ted Ellyard, confirmed fellow director Scott Spencer's earlier indications that Hardman would not accept Tap's offer. The Tap offer is conditional upon 80% acceptances being achieved, and this leaves Arc needing to lock up only another 10% of the stock to block the Tap offer, as it currently stands.

Arc director Alex Forcke today confirmed that Arc directors and 'friendly hands' controlled at least another 10% of the stock, which leaves Tap facing an uphill battle to achieve their required 80%.

Tap may well be prepared to accept less than 80% - after all 51% buys one control of a company - but under Australian Taxation Office law, anything less than 80% acceptance means shareholders would incur capital (CGT) gains tax. The CGT rollover relief clause negates having to pay CGT on a merger offer if 80% or more of the shareholders accept the offer.

It is understood that Tap have the ability to modify the offer to accept lower acceptances, but the impact of CGT on shareholders' gains would detract from some of the upside of the Tap offer.

Tap director Michael Dagostino could not comment on the possibility of a changed offer, deferring enquiries to managing director, Paul Underwood for comment under the onerous new takeover provisions of the Corporations Law. Mr Underwood was out of the office and unavailable for comment on Friday.