SDI Group is recommending a £2.84m management buyout two months after a bid team led by boss Gordon Smith first tabled its offer for the struggling automated warehousing systems firm.An initial approach on 10 May was priced at 2.6p a share in cash, a 23% discount to the previous session's closing price, although shareholders may get an extra 0.8p a share of contingent consideration.The FSU buyout vehicle has received irrevocable undertakings and non-binding letters of intent to accept the offer in respect of 46.5m shares, or about 42.4% of the existing issued share capital of SDI. Just over 21% oppose the deal.Payment of the contingent consideration depends on the release of certain bonded cash that is the property of a member of SDI, the euro/sterling exchange rate and the number of eligible shareholders.At the moment, the firm thinks 0.72p a share is the most likely outcome, though the money won't be paid before the end of March 2011."While there will ultimately be an upturn at some point, and the work done by SDI over the last 3 years since its IPO should position it to take advantage of this upturn, there is no certainty when this will happen or whether SDI will be in a position to take advantage of such upturn," said non-executive chairman Mark McMenemy."It is against this background, and the recently announced losses, that the independent directors have decided to recommend that it is in the best interest of shareholders to achieve a current cash return on their investment by accepting the offer."