Air Wis Services Inc. rejected as inadequate a $121 million takeover bid from a Connecticut investment firm, but left the door open for a higher offer. The offer of $16.365 a share from Cove Capital Associates Inc. of Greenwich, Conn., is the fourth takeover bid for the airline holding company since last November. Cove represents Transmark USA Inc., an insurance holding company based in Jacksonville, Fla. The offer rejected Wednesday includes $14 a share in cash and $2.36{ in preferred stock. The Air Wis board of directors said it would reconsider its stance if a higher, all-cash offer were made. Air Wis officials questioned how much cash Cove and Transmark could bring to the table without borrowing against assets of Air Wis, whose Air Wisconsin subsidiary operates United Express airline. ``Your proposal to utilize a form of preferred stock to finance a significant part of your acquisition costs suggests to our board that Cove Capital and Transmark USA may not have sufficient resources to effect an acquisition of the company at a reasonable price without borrowing significantly against the company's assets,'' Air Wis President Preston Wilbourne told Cove. Wilbourne said an acquisition that involved heavy borrowing could impair Air Wis' plans to expand and to acquire new equipment, bring route cutbacks and cause defaults on existing financial agreements. Last November, a group headed by Citicorp Venture Capital and two former executives of United Airlines offered $11.50 a share for Air Wis. That was followed by a bid from former Air Wis chairman Arthur Hailand and John J. Louis Jr., a director, for $14 a share. Hailand and Louis later raised their bid to $17 a share, comprised of $14 in cash and $3 in debt. All three bids were rejected by the Air Wis board. Hailand was removed as chairman when the board turned down his first offer.