MONTREAL - Investment firm Letko, Brosseau & Associates Inc. says it will vote against a proposal to take Dorel Industries Inc. private despite a move by Cerberus Capital Management LP to raise its offer.

The Montreal-based investment manager, which controls 12.2 per cent of Dorel's outstanding class B subordinate shares, says the offer "continues to significantly undervalue the company."

The buyer group led by U.S.-based Cerberus Capital Management LP, which has the support of Dorel's board, raised its offer for the shares not held by members of the Schwartz family, including Dorel's chief executive officer, to $16 per share on Monday in an attempt to win support from reluctant shareholders. It had earlier reached a deal for $14.50 per share.

Letko Brosseau says it has been a long time shareholder of Dorel and believes in the long-term potential of the company, noting that the Schwartz family plans to remain shareholders under the deal to take the company private.

Dorel, which makes a variety of consumer goods such as Cosco and Safety 1st child car seats, Cannondale and Schwinn bicycles, and furniture, will hold a special meeting of shareholders on Feb. 16 to vote on the proposed deal.

The transaction needs approval by two-thirds of the votes cast, and more than 50 per cent of the votes cast by non-family shareholders.