Scottish & Newcastle (S&N) said it had started talks with Carlsberg and Heineken on an offer at 800 pence a S&N share in cash.
The Danish-Dutch bidding consortium said it was raising its joint bid by 20p per share from the earlier 780p and that the whole of the extra cost will be funded by Copenhagen-based Carlsberg.
The offer values Britain's biggest brewer at £7.8 billion sterling (€10.34bn).
The Takeover Panel said it had extended the deadline for a firm offer by three days to noon on January 24th to enable the bidding consortium to complete its due diligence.
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S&N shares rose 5.5 per cent to 766 pence earlier today, Carlsberg dipped 3.7 per cent to 576 crowns and Heineken gained 3.9 per cent to €40.87.