UTC has offered $40.00 per share for Diebold, which represents a 66% premium on the vendor's $24.12 closing price on Friday, although the offer is still some way off from Diebold's 52-week high of $54.50.

UTC - which operates a number of diversified business including jet engine-maker Pratt & Whitney and UK-based Chubb security systems - says it has spent over two years trying to talk to Diebold about a deal but has been continually re-buffed. The conglomerate has now made the most recent correspondence between the firms public.

"UTC's resources and presence in markets globally would be significant assets to Diebold in expanding its business worldwide and increasing its margins and profitability," says UTC chairman and CEO George David in a letter to Diebold chairman John Lauer dated 19th February.

Lauer replied on 21 February saying the Diebold board had discussed the offer and decided it was not in the best interests of the firm or its shareholders.

Furthermore, in his letter Lauer requested that neither David nor any other representative of UTC contact any member of the Diebold Board.

However on Friday David again wrote to Lauer with the offer and said that after failing to engage in discussions with Diebold's board and management, UTC will go public with its proposal.

"We believe it is in your shareholders' interests to know of this proposal," says David's letter.

Diebold has not yet made any public comment on the UTC offer.

Shares in Diebold, which has been investigated by US Securities and Exchange Commission (SEC) over its revenue recognition practices, have fallen by around a half over the past year.

Last month the ATM and voting machine vendor said it was cutting 800 jobs - five per cent of its global workforce - following a disappointing 2007 and amid gloomy forecasts for 2008. The 800 job cuts are on top of an ongoing, $100 million cost-reduction programme.

Diebold president and CEO, Thomas Swidarski, also said the deteriorating condition of the credit markets within the US bank industry would likely result in reduced capital investment in branch construction, which will negatively impact Diebold's financial self-service and security businesses in 2008.

Update - Diebold rejects UTC offer

In a statement Diebold says its board of directors has "unanimously rejected" UTC's unsolicited proposal and recommends that shareholders "take no action at this time with respect to the proposal".

"The board strongly believes that UTC's proposal significantly undervalues the company and fails to reflect Diebold's strengths and significant upside potential," says Lauer in the statement. "UTC's proposal is an opportunistic attempt to buy Diebold at a time when shareholders do not have sufficient data to evaluate the offer and as such, the board believes that it would be irresponsible to engage in discussions with UTC at this time."