MAN, the German truckmaker, yesterday bowed to pressure from its new largest shareholder and offered friendly takeover talks from next week to Scania, its Swedish rival.

Scania will hold a board meeting this weekend. The letter from Hakan Samuelsson, MAN's chief executive, to his counterpart at Scania, Leif Östling, responds to a key demand of Volkswagen, the largest shareholder in both truckmakers.

It is also an implicit admission that his initial hostile €9.6 billion proposal - which was rejected by Scania, VW and Investor, the Swedish group's second-largest investor - has failed although MAN is refusing to withdraw it.

MAN's attempt to buy Scania has run into numerous problems leading to severe criticism from within the company and its supervisory board as well as in the industry.

The latest problem was sparked by carmaker VW's decision to buy a 15 per cent stake in MAN on top of its 34 per cent voting stake in Scania, putting it in a good position to have a blocking minority in the German group and ensuring its position as "kingmaker" in any deal.

Scania declined to say whether it would accept the offer ahead of its board meeting but pointed out "there is still a hostile bid on the table" that it had rejected.

Several people close to Scania's board said it would meet at the weekend to decide how to proceed.

"Everything is in play," one said, adding that included a counter bid for MAN as well as acceptance of the German group's offer of talks.

But VW is understood to be opposed to a counter-bid and wants to see MAN buy Scania.

The German carmaker will update markets on Monday of its intentions on how to produce a three-way alliance between its Brazilian heavy truck assets, MAN and Scania. Rumours were swirling last night that this could be through a three-way merger rather than a takeover.