Diebold Inc. released a letter from its chairman to United Technologies that calls the Connecticut company's $40-a-share buyout offer ''opportunistic'' and ''inadequate.''

The letter sent out Wednesday morning also said that United Technologies Corp. has mischaracterized the history of discussions between the two companies and that the company previously had never made a firm offer for Diebold.

United Technologies, meanwhile, responded by issuing a release saying it remained interested in buying Diebold for $40 a share and is ready to begin discussions now.

Also, an industry analyst in a note to investors said United Technologies might raise its offer by $2 a share over the next 60 days, based on its acquisition record. But Diebold needs additional bidders to get the company to increase the offer, wrote Gil Luria at Los Angeles-based Wedbush Morgan Securities, according to Bloomberg News.

Diversified conglomerate United Technologies on Sunday revealed that it was offering $2.6 billion for Diebold, the Green maker of automated teller machines and electronic voting machines. The disclosure sent Diebold stock soaring up 61 percent on Monday from Friday's closing price of $24.12. United Technologies took in $54.8 billion in 2007 making Pratt & Whitney jet en
gines, Sikorsky helicopters, Carrier air conditioners, Otis elevators and more; Diebold's revenue in 2006 was $2.9 billion.

Diebold quickly responded Monday that it had rejected United Technologies' offer.

Wednesday's letter clarified Diebold's position.

''Your $40 per share offer is 27 percent below Diebold's 52-week high of $54.50 reached only seven months ago. Moreover, your offer is an opportunistic attempt to acquire Diebold at an inadequate price that does not reflect significant progress against our current strategic initiatives,'' Diebold Chairman John N. Lauer wrote. ''Simply put, (United Technologies') proposed offer is far below what Diebold is worth. Furthermore, your overture, which comes at a time when we cannot responsibly engage in discussions, and the hostile nature of your approach, has convinced the (Diebold) board that discussions now will not likely result in the best outcome for our shareholders.''

The letter said that because Diebold is in the process of revamping its financial statements (as part of an SEC investigation into former accounting practices), shareholders have no basis on which to evaluate the United Technologies bid.

But United Technologies said Diebold's financial and stock performance and ''the inability of Diebold's leadership to file timely financial statements'' are not valid reasons to avoid discussions.

''(United Technologies) remains ready to discuss its proposal with the Diebold board of directors,'' the company said in a statement. United Technologies said it is is ready to begin the due diligence process immediately.

Chances for growth

Louis Chenevert, United Technologies president and chief operating officer, told analysts at an industrial manufacturing investors conference Wednesday that he thinks there will be substantial opportunities to increase Diebold's profit if his company successfully buys the it. He said his company made a ''compelling'' offer to Diebold's board.

''We like Diebold a lot and we'll see how it plays out,'' Chenevert said. ''We think we can create significant value.''

United Technologies executives need to look at Diebold's financial books once Diebold finishes revising its financial statements, he said.

While Chenevert declined to publicly discuss acquisition tactics or strategy, he said United Technologies sees opportunities to expand its fire and security business footprint in the United States by buying Diebold.

Details of contacts

Lauer's letter also said United Technologies mischaracterized contact between the two companies over the past two years.

''Prior to your letter dated February 29, 2008, (United Technologies) had never made a firm proposal to acquire Diebold,'' Lauer wrote. ''In fact, (United Technologies) approached Diebold on only two occasions with nonspecific inquiries — first a brief, informal conversation that took place roughly two years ago between an investment banker (who did not identify his client) and a Diebold board member; and second, your letter dated February 19, 2008, which referenced a vague proposal without any specific price. Two points of contact separated by two years does not, in our opinion, represent 'constructive discussions to increase shareholder value' as you have publicly stated.''

Diebold employs about 2,100 people at its Green campus. Shares of Diebold fell 6 cents to $37.62 on Wednesday.