This week will be a crucial period for Dunloe House, the property company controlled by Dublin solicitor, Mr Noel Smyth. The company will have to declare the level of acceptances for its bid for the Belfast property group, Ewart, by Wednesday. If it wants to increase its bid, it will (under the usually applied rules) have to do so by the following Sunday, which, in effect, means Friday, the last working day (unless there is a subsequent counter bid).

Otherwise, in the absence of sufficient acceptances, the bid will lapse. And if it lapses, all its overtures will have been in vain. And the cost? A cool £500,000 will have to be paid by Dunloe, while Ewart shareholders will face an estimated £250,000 cost. So what should Dunloe do? The initial offers of 67p sterling cash, or 70p loan stock, for each Ewart share, are much too low. They are unattractive against Ewart's net asset backing of 81p and share price of 74.5p (or 89p converted into pounds). Whereas Ewart has had the benefit of a revaluation of its properties which pushed up the net asset value per share from 66p to 81p in just six months, Dunloe has had the benefit of its shares rising from 22p to 26p on the Irish market. This places a better complexion on the share alternative offer of 18 new Ewart shares for every 5 Ewart shares - valuing the Ewart shares at almost 94p (78p sterling). This is closer to the real value of Ewart's share but is still a bit scant. In addition, investors contemplating acceptance will have to ask a very relevant question - are Dunloe shares too high? The latest figures from Dunloe appear to indicate a net asset value per share of about 18p but this includes valuations on development properties which, if excluded, would bring the value down to about 11p.

In the absence of new valuation figures, and further details of the company's development plans, the share price does appear to be at too big a premium on the value of its net asset. If Dunloe is a serious contender it will have to increase its cash and loan stock offers appreciably and also the share offer. The level of acceptances to date, just 0.4 per cent, has been dismal. Curiously, Mr Smyth, who owns 26 per cent of Ewart, has not, so far, accepted.

It could be a tactical move by him but Ewart investors could legitimately ask why should they accept if he does not? When the announcement of acceptances is made (probably early on Thursday morning), it is likely to include his acceptances - any other conclusion would be bizarre. Mr Smyth has said: "If I don't get to the stage where I can get the company (Ewart) by the scruff of the neck and bring it along, I'll have to leave and take my money where I can bet a better return." Ironically, if he did place his shareholding (and if the chairman, Mr Brian O'Connor, who has a 16 per cent stake, did likewise), the marketability of the Ewart shares would be improved.

But he went in at a high price of 68p sterling per share, while Mr O'Connor bought at between 64.5p sterling and 70p per share. They would need to be taken out at more than 75p sterling to just breakeven. It would be hard to quarrel with Mr Smyth's statement that an all-Ireland property company makes "absolute commercial and logical sense". Indeed, a matching of Ewart's solid assets and rejuvenation with Dunloe's flair should make a good combination. But this would have to be on the basis of a mutually acceptable deal. It has been suggested that in the absence of a bid, Ewart's share price would collapse. The bad odour surrounding Northern Ireland publicly quoted groups, following the Powerscreen fiasco - and Mackie to the lesser degree - may create a little unease about Ewart. Also, the sceptics may wonder if the impetus displayed by Ewart, under the unwanted takeover threat, can be sustained. However, the enhanced net asset backing, and the good interim results should place a prop of 70p sterling to 75p under the share price. That prospect, a low level of acceptances, and the possibility (and that is all it is) of a counter bid, will be weighed up by Dunloe as it decides to allow the offer to lapse, or to raise it this week.