QBE’s softly-softly approach to its IAG takeover is beginning to draw criticism from analysts and commentators.

Nearly a month after its initial offer, the insurer has failed to launch a formal bid or move beyond the initial terms rejected by IAG.

Writing in The Australian last week, influential business commentator Bryan Frith called for urgent action to counter the growing trend for companies to propose takeovers rather than make a formal offer.

Formal offers require a bid to be lodged within two months of being announced. There is no such requirement of QBE, which has merely proposed a scheme of arrangement to IAG.

QBE therefore has total control over any deadline its wishes to impose, and is accused of potentially creating market uncertainty as the date continually shifts.

The initial offer of 0.142 QBE shares plus 70c for each IAG share hasn’t changed, with QBE last week extending the offer until next Monday. IAG continues to stand by its initial dismissal of the proposal as “totally inadequate”. Analysts suggest the IAG board probably has investor support in holding out for a higher price.

Fairfax columnist Malcolm Maiden says QBE’s offer for IAG is a “teddy-bear hug” that will have to be stronger to succeed. “If QBE CEO Frank O’Halloran pulls off the deal at this price, he’s a genius,” he said. “The group is worth more than QBE is offering.”

Since QBE made the proposal public on April 15, stock values in the two companies have moved to inflate the value of the QBE offer, which now stands at more than $8 billion.

Mr Frith says Australia needs legislation similar to Britain’s “put up or shut up” rule, under which a deadline can be imposed on the bidder to force it to either announce a bid or give up. If a firm walks away, it cannot try again for at least six months.

Media reports that Zurich Financial Services and American giant AIG are now running their rulers over IAG have been dismissed by industry insiders as no more than speculation.