British bank Barclays raised its bid for Dutch group ABN AMRO to €67.5 billion ($93 billion) on today, helped by some of the biggest ever overseas investments by China and Singapore.
Barclays said its new bid included €24.8 billion in cash and was up from its previous all-stock offer of €65 billion. The offer is still below a rival €71 billion bid from a group of European banks led by Royal Bank of Scotland (RBS).
A deal with either Barclays or the RBS team, which includes Spain's Santander and Belgian-Dutch group Fortis, would be the biggest ever bank takeover.
Analysts said Barclays was playing a shrewd game, signalling it would not engage in a destructive bidding war but also creating the possibility that a strong rise in its shares could push the value of its bid towards the RBS team's price.
"We continue to believe the (RBS) consortium will prevail," Bernstein analysts said in a research note.
"But with the value gap to the consortium offer now only about 7 per cent and the offer remaining 63 per cent stock, gains in Barclays share price would further close the gap."
At 11:45 GMT, Barclays shares were up 2.9 per cent at 734 pence, boosted by the investment from China and Singapore and strong first-half results, and lifting the value of its new bid for ABN AMRO to almost €69 billion.
ABN shares were up 0.9 per cent €36.95, above the current value of the new Barclays bid at €36.39 but below the current value of the RBS group's bid at €38.30.
Some analysts believe the RBS offer has greater risk of failing because of its complexity and regulatory issues.
Barclays, Britain's third-biggest bank, said its new offer had not been recommended by ABN AMRO, but Chief Executive John Varley said he hoped and expected that it would be.
ABN AMRO, which has come under pressure from some shareholders to back the higher RBS consortium bid, said it was assessing both offers, but noted the planned strategic cooperation with China and Singapore would boost the growth opportunities available to the combination with Barclays.