Exel values Tibbett at £328m

Tibbett's directors have backed the cash bid of 668 pence per share, which values the firm at £328m ($595m).

Exel said that "significant strategic benefits" could be achieved by merging the firms, adding it could make cost savings of £15m-£20m a year.

Tibbett & Britten employs 35,000 people and moves and stores goods for firms such as Debenhams, Coca-Cola and Tesco.

In March, it reported a fall on profits to £20.1m after what it described as an "unsatisfactory performance" at its Americas business.

However, last month it announced it had won a number of new deals with companies including Proctor & Gamble, Michelin and Kraft.

Exel has a workforce of about 74,000 employed in more than 120 countries.

Tibbett's executive chairman John Harvey said the tie-up promised to be an "excellent strategic fit with complementary sectoral and geographic strengths".

Shares in Tibbett & Britten were up by nearly 14% at 666p by 1045 GMT after news of the offer. Its shares had jumped by nearly 20% on Tuesday after it announced it had received a bid approach.

But Exel shares fell 4.5 pence to 700.5p as investors worried it was paying too much for the firm.