Sanne said the unsolicited offer of 875 pence per share from Cinven was the fifth such proposal made by the fund. The company in May rejected a 1.35 billion pounds offer from the investment group and said it undervalued Sanne.
Cinven's latest offer represents a premium of about 13% to Sanne's last closing price of 772 pence. Its London-listed stock was around 12% higher in morning trade and hit a record high of 868 pence, but was still shy of the offer price.
Consolidation and private equity deals in Britain, Europe's biggest M&A market, have risen in recent years. Sanne is one of the latest additions to takeover targets, joining firms such as John Laing , Equiniti and Spire.
Sanne provides outsourcing services to nearly 2,000 clients, varying in type from private debt to capital markets and real estate. It recorded a 12% rise in earnings last year as it won new businesses and made several acquisitions.
However, its shares had lost nearly 10% in value.
The company was likely put under pressure by shareholders to consider a bid after the initial approach from Cinven was made public, Liberum analyst James Allen said in a note.
"We ... believe that the board will recommend the bid from Cinven and that the takeover will go through," Allen added.
Jersey-based Sanne said Cinven now has until July 9 by which it needs to either announce an intention to make a firm offer or back out from buying the company.
Cinven, whose investments are focussed in North America and Europe, declined to provide details beyond those given by Sanne.
($1 = 0.7052 pounds)
(Reporting by Pushkala Aripaka in Bengaluru; Editing by Subhranshu Sahu and Kim Coghill)
By Pushkala Aripaka