In my opinion old JAMMA/MVS or any type of those cabs should never be bought for over £300, and even then it should be a minter if it's not a true classic collectible (which should then be worth up to a grand).
When it comes to retro items and collecting, an item's only worth as much as someone is willing to pay for it - I've seen websites putting 4-figure values on classic machines, but if all the offers you get are for £500, then that's it's true value.
If you are really interested in this machine then offer what you can afford and what you think it's worth. If you only think it's worth £100 then don't pay more than that for it, else you're a sucker. Ebay auctions with 'best offer' additions are set to auto-decline below an amount the seller sets and as you only get up to 3 'best offer' submissions, make your next one more realistic. If you've got the cash and really want it/think it's worth it, offer £300 flat. If it's auto-declined he's not very flexible and is probably punting for the full amount, so walk away.
As many will tell you here, if a multi-game system is what you want, you'd be better off spending about the same on building your own PC-based system (this is BYOAC after all). If you're thinking of trying to make a profit by re-selling arcade machines, think again as like I say it's unpredictable market and if you do find a buyer are they gonna pay top dollar? You may make money on the sought-after marked machines on KLOV, but even then you'll be lucky to find the rarities that will turn a profit.