The board of the Australian water company Neverfail Springwater has announced that most of its directors will now recommend that shareholders accept the takeover offer by soft drinks group Coca Cola Amatil.

CCA now has an 85% acceptance rate for its A$2.35 per share takeover offer for Neverfail.

In a statement Neverfail said: "The directors have determined to withdraw their recommendation that Neverfail shareholders not accept the CCA offer and to instead recommend that Neverfail shareholders accept the CCA offer."

However, it also said that while deputy chairman John Fox had withdrawn his opposition to the bid he was not able to make any further recommendation in relation to the takeover bid.

Neverfail continued: "This may be too short a period of time for the benefits of Coca Cola Amatil control to be realised, and thus the remaining minority shareholders may not have sufficient time to participate in these benefits."

The company also warned shareholders that if Coca Cola Amatil did not acquire a 90% interest in Neverfail through the offer, which would trigger a compulsory acquisition of the remaining shares, the liquidity of shares could be adversely affected.