UPDATE 2-UK's Sanne agrees to sit down with Cinven after fund makes higher offer

* Sanne shares hit record high, but short of offer price

* Cinven’s fifth offer stands at 875p per Sanne share

* Liberum: Board likely to back offer, takeover to go through (Adds Cinven, analyst comment and share movement)

June 11 (Reuters) - Britain’s Sanne Group said on Friday it will enter into buyout talks with Cinven after the private equity firm made a sweetened all-cash offer of 1.42 billion pounds ($2.01 billion) for the asset management services provider.

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