The world's largest food and beverage group, Switzerland's Nestle, is being tipped as the most likely contender to launch a counter bid against Coca-Cola Amatil's takeover attempt of the home and office water business Nerverfail Springwater.

Neverfail today once more made it clear that it believed Amatil's bid was inadequate. It said that it would seek the best value for shareholders, possibly including the "active solicitation of rival bids".

In a report by the newswire service Dow Jones, an industry source was quoted saying that Nestle had made initial enquiries through its investment bankers, however no formal approach has been lodged.

The source also said that Neverfail was in discussions with other companies, including fellow Australian groups who had shown an interest in the company before.

On Monday Amatil acquired a 15% stake in the leading Australian HOD company and then launched a A$2.25 a share takeover offer.

Terry Davis, Amatil's managing director has said he believes the price to be fair but Neverfail's board have countered saying it undervalues the company's potential. Shares in Neverfail have since leapt beyond the Amatil bid price, closing today at A$ 2.50, off a day's high of A$2.54. At its closing price, the company has a market value of A$237m.

"The board confirmed its preliminary views that the CCA offer is inadequate and undervalues the company and accordingly has resolved to develop an approach to this situation which will seek to maximize value for shareholders," Neverfail said in Friday's statement.

"The board has authorized a board subcommittee to consider the CCA offer and any other offers that may be received, administer the day-to-day running of this situation, and keep the market fully informed of any material developments," it added.