* Loxam approaches Lavendon over potential cash takeoveroffer
* TVH Group last week made 205 pence a share proposal
* Shareholders could expect 215-220 pence a share - analyst
* Lavendon shares jump 7.7 pct to two-year high (Adds analyst comment, details, background, share movement)
By Esha Vaish and Maiya Keidan
Nov 28 (Reuters) - European industrial equipment supplierLoxam SAS has made a takeover approach to rival Lavendon Group, setting the scene for a bid battle for the British firmwhich has provided aerial work platforms for Harry Potter films.
Shares in Lavendon, which last week received a348-million-pound ($433 million) bid proposal from Belgianequipment supplier TVH Group, jumped as much as 7.7 percent onMonday to a two-year high of 220 pence.
That is well above TVH's proposal of 205 pence per share incash, suggesting investors are hopeful of a higher offer.
Loxam said its proposal was also in cash, but did notdisclose the value.
Analysts said Loxam had made several acquisitions in recentyears and Lavendon would fit well into its portfolio. TVH saidlast week buying Lavendon would help it expand its specialisedequipment rental business.
Although TVH's proposal had by Friday won the backing ofinvestors holding about 16.9 percent of Lavendon shares, theBritish firm's board had not backed it.
Lavendon, which gets nearly half of its revenue from theconstruction industry, asked its shareholders last week to takeno action on TVH's proposal, citing concerns over execution riskand potential business disruption.
Analysts linked this to a lack of support from M&G, which isLavendon's largest shareholder with a stake of 18.65 percent,according to a Nov. 22 filing. A spokeswoman at M&G declined tocomment.
Panmure Gordon analyst Adrian Kearsey said he expectedLavendon investors to seek around 215 pence to 220 pence ashare. The company's house broker Peel Hunt has a target priceof 275 pence.
Lavendon on Monday asked shareholders to take no action onLoxam's approach.
Hedge fund firms Sand Grove Capital Management and MVN AssetManagement increased their stakes in Lavendon after TVH's bidproposal last week.
($1 = 0.8041 pounds) (Reporting by Esha Vaish in Bengaluru and Maiya Keidan inLondon; Editing by Susan Thomas and Mark Potter)
