IAG last night formalised its rejection of QBE’s latest “inadequate and incomplete” takeover proposal.

The comprehensive rejection of QBE’s latest proposal in the five-week takeover saga may see QBE withdraw from the chase, having said on Monday that its latest revised offer is also its last.

Chairman James Strong has basically suggested QBE put up or shut up, saying IAG is willing to “engage further” with QBE to reach an acceptable premium and price, but added: “If QBE considers that its proposal is sufficiently attractive it is able to put a fully developed offer directly to IAG’s shareholders.”

In a statement issued last night after a board meeting in New Zealand, the group said Friday’s “final proposal” by QBE is “priced opportunistically to take advantage of the short-term weakness in IAG’s share price, primarily caused by a low point in the insurance cycle of IAG’s core markets”.

It said QBE’s improved terms of 0.145 of its own shares plus 90c in cash for each IAG share do not adequately reflect “the underlying value or the significant synergies and value” of a merged group.

And IAG criticised the QBE proposal for not being a fully developed offer or bid. It said QBE has presented only “ a partial proposal which requires the board to agree now to recommend to shareholders a proposal via a scheme of arrangement”.

Mr Strong says his discussions with QBE “have not explored other terms and conditions”.

“An essential consideration in any transaction involving insurance companies is a comprehensive understanding of each of the businesses, including adequate due diligence by both parties particularly given the long-tail nature of some of the risks underwritten in those businesses.”

There has been no immediate reaction from QBE, which could revise its offer again and make a formal offer to shareholders. Or it could sit back and watch the impact of the rejection on IAG’s share price over the next few days.

IAG’s shares yesterday closed at $4.23, up 3 cents. QBE finished 27c ahead at $25.67, which put a value on each IAG share of $4.62.

We’ll keep you informed of developments.